The enterprise applications market continued to grow in 2020 as organizations accelerated their digital transformation efforts in response to the business disruptions caused by the COVID-19 pandemic.
According to a new report from IDC, the enterprise applications market grew 4.1% on year in 2020 with worldwide revenues reaching US$241 billion. The top-5 enterprise application vendors in 2020 were SAP, Salesforce, Oracle, Intuit, and Microsoft, which together accounted for 22.8% of worldwide revenues.
Digital resiliency, the ability for an organization to rapidly adapt to business disruptions by leveraging digital capabilities to not only restore business operations but also capitalize on changed conditions, became a focal point for organizations in 2020. As the core technology systems that most organizations use to conduct business, enterprise applications are critical to both an organization's resiliency and its digital-first strategy.
"Digital resiliency is a requirement in the digital-first world. Rapidly adapting to a business disruption requires a business to leverage its digital capabilities within its enterprise application portfolio. Modular, intelligent applications are helping the organization leverage the data and gain insights to better maneuver the organization so it can remain resilient and capitalize on the changed conditions," said Mickey North Rizza, program vice president, Enterprise Applications and Digital Commerce at IDC.
IDC forecasts worldwide revenues for the enterprise applications market will be nearly US$334 billion in 2025 as organizations revamp their applications portfolios to deliver the digital resiliency and flexibility needed to thrive in the digital economy. This will be a gradual process as organizations evaluate their current portfolios, and the many customizations across these applications, and map out a transformation strategy.
Demand for public cloud-based enterprise applications is expected to produce a five-year compound annual growth rate (CAGR) of 13.6%, surpassing the 6.7% CAGR for the overall market and overtaking on-premises software in the next several years.
The enterprise applications market is comprised of the following secondary markets: enterprise resource management (ERM), customer relationship management (CRM), engineering applications, supply chain management (SCM), and production applications. Each of these secondary markets consists of multiple functional markets.
