Banking, manufacturing and government investments spur enterprise software market in Middle East and North Africa, says IDC

According to a recent study by IDC, the strong growth of over 39% year-on-year in 2006 will slow to less than 36% in 2007 and 28% this year. According to preliminary results, the market reached almost $390 million in 2007 and is predicted to hit $500 million in 2008.

'Several countries in the region, particularly the Gulf States, are investing heavily in modernizing and strategically diversifying their economies, spurring tremendous growth in the EAS market as a result,'

said Vinay Nair, Senior Research Analyst, IDC MEA.

'In the key verticals like retail, banking, and manufacturing, companies are adopting progressive IT strategies and boosting their EAS investments accordingly.'

The EAS market in the MENA region is fueled by a fierce fight for leadership between rivals Oracle and SAP. In 2006, Oracle led over SAP by a close margin, while 3i-Infotech placed third. Together, the top three players controlled 68.5% of the total EAS market. On the country level, though, the top two positions are reversed in some cases.

Companies across the region invest most heavily in Enterprise Resource Planning (ERP) solutions. This segment soared by a third in 2006 to almost $206 million. Customer Relationship Management (CRM) as part of enterprise application suites was second most in demand, shooting up by 97.5% year-on-year to $38.5 million. Supply Chain Management (SCM) was third with a value of $33.80 million, which represents an almost 39% year-on-year increase in spending.

On the demand side, the finance vertical is the biggest spender with an estimated 19% share of the market in 2007. Process manufacturing was the second largest vertical with more than 16%, and the government sector, including health care and education, ranked third, accounting for nearly 14% of total EAS investment in the region last year.

'We expect EAS investment to grow particularly rapidly in the government sector and the retail industry over the coming years,' said Nair. 'These two vertical markets, along with transportation, have been the fastest-growing industries in the region. Over the next five years, we predict that the oil and gas industry will expand at a slower rate than the overall market and will account for a smaller share of overall EAS spending in 2011 than it did in 2006.'

IDC's Arab Middle East and Egypt North Africa Software Solutions 2007-2011 and 2006 Vendor Shares (IDC #ZR01P) provides a detailed overview of the regional market for high-end integrated package software products. Covering Egypt, Saudi Arabia, United Arab Emirates, Other Gulf Cooperation Council Countries (OGCC, Bahrain, Kuwait, Oman, and Qatar), Levant (Jordan, Lebanon, and Syria), and North Africa (Algeria, Morocco, Tunisia), the study carries detailed qualitative and quantitative information, analysis and forecasts that help vendors answer key questions regarding market sizing, segmentation, market shares, and major economic and political factors affecting the EAS market.