Madar Research reports 16 percent growth in GCC ERP market in 2004

Healthy growth in sales of the elaborate business software has raised the market value from $134 million in 2003 to $155 million by end 2004.

Numerous mid-market implementations, particularly in the United Arab Emirates, in addition to aggressive growth in ERP implementations among the manufacturing, retail and wholesale, and diversified business sectors in Qatar, UAE and Saudi Arabia contributed to a slightly higher than expected growth in 2004.

"The year 2004 has been exceptionally good for both sellers and users of ERP solution, as the need to improve business information and the long-term cost savings increasingly outweighed the high price of software and infrastructure," says Abdul Kader Kamli, president and research director of Madar Research. "Unusually high GDP growth in GCC countries in 2004, due mainly to high oil prices and the consequent abundance of cash flow, has also played a role in encouraging more organizations and businesses, especially in the government sector, to speed up their ERP adoption," says Kamli.

However, ERP spending in the GCC is expected to experience a more moderate growth - though higher than the projected world average of between six and nine percent. The study forecast a compound average growth rate of 14 percent in the next five years, which will see the region's ERP market touching the $300 million mark by end 2009. The slight decrease in growth will be caused primarily by a foreseen thinning number of new acquisitions by large enterprises, with spending by this segment now concentrated for the most part on services and maintenance or license upgrades.

The largest spender on ERP in the GCC, Saudi Arabia, is responsible for almost 60 percent of the market, followed by the UAE and Kuwait, according to the study. The study also points to a significant increase in spending on ERP training by GCC companies, which in the long-run would ease dependence on external support and consultancy.

The study also includes ERP market breakdown between software and services, demand on various ERP components, market breakdown by industry, market drivers and inhibitors, global spending comparison and regional market trends.

The Dubai Media City-based company earlier this month announced the release in November 2005 of a comprehensive study dedicated to the UAE emerging knowledge-based economy and information society. The UAE Knowledge Economy 2005-2010, will offer statistics and analysis on the components and characteristics of the local knowledge-based economy and how it is growing and contributing to the country's overall economy.