This week in my column I want to quote from two of the biggest information houses of the information and communications technology (ICT) industry, Gartner and IDC. Both reports complete each other perfectly and show why Turkey will remain a country to invest in for the technology giants.
Worldwide spending on enterprise application software will total $120.4 billion in 2012, a 4.5 percent increase from 2011 spending of $115.2 billion, according to Gartner, Inc. With only limited signs of improvement in the near term, the growth projection for 2012 has been adjusted downward from 5 percent in the previous forecast in 1Q12 (first quarter of 2012).
The key enterprise application software market segments in 2012 include business intelligence (BI); content, communications and collaboration; customer relationship management (CRM); digital content creation (DCC); enterprise resource planning (ERP); office suites and personal productivity; project and portfolio management (PPM); and supply chain management (SCM).
In 2011, the Turkish enterprise application software (EAS) market grew 16.6 percent year on year in U.S. dollar terms to reach $138.91 million. Expressed in local currency, growth was 29 percent, due to the substantial depreciation of the lira. According to a recent study by market research and advisory company IDC, the growth was driven by heavy investments by organizations in the manufacturing, retail and telecommunications sectors when compared with the previous year. IDC expects the Turkish EAS market to expand at a compound annual growth rate (CAGR) of 12.2 percent to reach $246.54 million at the end of 2016.
Enterprise resource management (ERM) accounted for the largest share (43.7 percent) of EAS revenue in 2011, followed by business analytics (BA) with 17.6 percent and customer relationship management (CRM) with 16.1 percent. Supply chain management (SCM) came fourth with 13.2 percent of total market revenue, followed by operations and manufacturing applications (OMA), with 9.4 percent.
“Customers investing in EAS solutions are far more aware of the potential benefits than ever before, and are motivated by the prospect of lowering operating expenses and leveraging EAS applications to boost efficiency,” says research analyst Ayşe Kaptanoğlu from IDC Turkey. “We expect that the main drivers of EAS spending growth in 2012 will be ERM, CRM, and business intelligence. We will also see the positive impact of SaaS on the CRM market in Turkey as several EAS vendors announce cloud-based solutions.”
In 2011, the top EAS providers in Turkey were SAP, Oracle, Logo, Microsoft and Netsis. Together they controlled more than a third of the market. The combined manufacturing sector was the biggest EAS spender last year, with the wholesale services and telecommunications sectors the second and third biggest investors in EAS respectively.
These statements clearly show that the growth in Turkish industry will remain strong or at least better than that of other countries as they are continuing their investments in ICT. I will elaborate more on this in the following weeks.