6/9/99
Dataquest Predicts: New ERP boom awaits, prompting acquisitions
by Jo Pettitt in Paris
Year 2000 will impact corporate spending on ERP, but only in the short term, according to analysts from industry researcher Dataquest.
At the company's Predicts 99 conference in Paris today, senior analyst Ben Pring said that despite a current slowdown in corporate spending on ERP and related services, Y2K work has been the biggest driver of growth in the sector over the last couple of years.
“Year 2000 work has been the number one catalyst for the whole wave of replacing legacy applications with ERP applications which we have seen over the last 24 months,” said Pring. “However, this window has closed now, but it will pick up again soon.”
Pring went on to say that even as soon as the first quarter next year, the ERP market will return to healthy growth, which will continue for at least another five years.
“The product market will not pick up fantastically from now until the end of the year, but there will be a significant rise at the beginning of 2000,” he said.
He continued: “One of the key reasons for our faith in the market is that, despite the hype over ERP in the last year or so, ERP application development only accounts for around 13 per cent of all application development work in Europe, and only a few percentage points more in the rest of the year. So, there's plenty of potential for ERP to grow.”
Pring went on to predict market consolidation over the next few months.
“ERP software manufacturers will develop into solutions suppliers. Companies like SAP want to become more integral in the delivery of ERP solutions," he said. "As a result, Dataquest predicts that soon one or more of the tier one ERP product manufacturers will attempt to acquire a leading services provider,” he added.
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