The ERP software market has been around for over 40 years and is still thriving today. By constantly leveraging technological developments and providing opportunities for business innovation, the ERP market has grown alongside the industries that it serves for decades — and is projected to continue this pattern. This article analyzes the ERP market in 2020 and beyond, including a list of the software vendors that are dominating the ERP market share today.
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ERP Market: An Overview
In 2018, the global ERP market was valued at $35.81 billion. This is the latest data available in terms of a concrete number that represents the ERP market size, but 2020 is expected to exceed $49 billion. However, the COVID-19 pandemic poses a new variable that could potentially lead to a different outcome than experts originally predicted.
Or perhaps the pandemic could lead to more ERP sales — in an attempt to develop more agile supply chains — something that has become integral to the coronavirus response.
Barring an economic downturn, the ERP software market is predicted to reach $78.41 billion by 2026, growing at a CAGR of 10.2%, according to Allied Market Research. Read on to find out the “who, what, where and why” behind this predicted growth for the ERP market.
How Did We Get Here?
At this point, you’re probably wondering: what are the driving forces behind this 40-something-year-old software market? And how do certain software vendors come to succeed in dominating the ERP software market share?
To answer the first question, the ERP market is propelled forward by its ability to continually revolutionize business processes at companies in a wide range of industries. Year after year, ERP vendors come up with new ways to improve companies’ bottom line.
As for our second question, in the most basic sense, the vendors that produce the best business results for their customers become the most popular. They often accomplish this by leveraging the newest technology available, to provide innovative solutions, as we mentioned earlier.
Another driver of success relates to incorporating current ERP buyer trends in their solutions. Whether software engineers are creating an ERP from scratch or simply generating updates for their current systems, it’s vital to provide customers with the system features they need to gain competitive advantage in the modern business world.
Buyer Trends and Insights
Following our last point, we’re going to outline some of the current ERP buyer trends. According to a Market Watch press release, the ERP market is experiencing:
- Rise in need for operational efficiency and transparency in business processes
- Increase in adoption of cloud and mobile applications
- Surge in demand for data-driven decision-making
- Increase in demand for ERP software among small and medium-sized businesses
- Rapid technological advancements
While at the same time, higher maintenance and investment costs are impeding ERP market growth. The press release also noted that the ERP market is divided — by software and service – and the service sector is predicted to demonstrate the fastest CAGR of 12.1% by 2026.
You can read more about 2020 ERP trends here.
Who is Buying an ERP?
According to Market Research Future, several verticals are buying into ERP, such as aerospace and defense, financial services, retail, manufacturing and more. They predict that the financial services industry will be the most frequent buyer of ERP and businesses of all sizes will buy ERP.
Compare Top ERP Software Leaders