Banking, manufacturing, and oil and gas drive the hot enterprise application software markets of the Arab Middle East and North Africa, says IDC

According to a recent IDC study, it will shoot up another 12.5% this year as budget surpluses from high oil prices are poured back into the national economies as part of diversification programs, fueling the competitive environment, and creating need for advanced enterprise applications. In terms of implementation, banks, discrete manufacturers, and the thriving oil and gas industry accounted for more than 40% of EAS investments in the region last year.

'Although small and medium-sized organizations are now implementing EAS solutions and generating new demand,' says Vinay Nair, Senior Analyst, Software, IDC Middle East and Africa, 'leading vendors are in a heated battle for clients. The primary arena has been mainly the large enterprise segment and the replacement market, but the price slashing and aggressive sales approach have spilled into the SMB segment, creating a buyer's market despite the high demand.'

Saudi Arabia was the largest EAS market in the MENA region in 2005, followed by the UAE. They will maintain these positions again this year. The four countries of Bahrain, Kuwait, Oman, and Qatar represented the third largest EAS market. Together, the GCC countries represented nearly 83% of spending. Saudi Arabia and the UAE expanded the fastest, their growth rates being nearly identical and likely to remain so this year and in 2007.

'North Africa will be the most dynamic market in the medium term,' says Nair. 'In terms of EAS and IT in general, it is still underdeveloped and there is a great deal of pent-up demand. Tapping it will require careful articulation of strategy and hands-on training for implementation partners, as partners are increasingly focusing on a limited group of products. The more involved they are with a product and the more support they receive, the more likely they are to promote a given vendor's portfolio.'

Five vendors accounted for three fourths of the MENA EAS market: SAP, Oracle, Microsoft Dynamics, 3i Infotech, and Sage. SAP and Oracle led the EAS market last year in first and second. Microsoft Dynamics grabbed a distant third, edging out 3i Infotech, which took fourth. Sage was fifth.

'Globally, competition between vendors extends beyond the implementation of EAS solutions to the application platform itself,' says Nair. 'Fortunately in the MENA midmarket, many organizations have yet to commit to an EAS solution and migrating from one platform to another will not be a cumbersome or costly process. Vendors, however, will still need cogent arguments not just for adoption of EAS but also for the long-term benefits of their preferred platform.'

IDC's Arab Middle East and North Africa Software Solutions 2006-2010 Forecast and 2005 Vendor Shares (IDC#ZR03N) provides a detailed overview of the MENA market for high-end integrated EAS packaged software products. The study includes detailed qualitative and quantitative information, analysis, and forecasts. It delineates the defining characteristics of the MENA EAS market, shows which segments are investing in EAS solutions, and notes how future spending will affect market development. The study covers the primary EAS operating environments, how sales will affect third-party hardware and software vendors, and how vendors across the IT spectrum (hardware platform vendors, database vendors, operating system vendors, and enterprise application vendors) can capitalize on the continued expansion. In addition to noting how political and economic conditions specific to MENA will affect the market, the study also tracks and analyzes leading players.