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IDC Retail Insights Presents Big Data and Analytics Foundation for Next Generation Revenue Management

IDC PMS4colorversion 1 300x99 IDC Retail Insights Presents Big Data and Analytics Foundation for Next Generation Revenue Management

IDC Retail Insights  today announced the availability of a new report, “Business Strategy: Big Data and Analytics Lay the Foundation for Revenue Growth,” (Document # RI250177) which describes the Big data and analytics (BDA) foundation for revenue growth and charts the likely rapid evolution of new capabilities. The report presents a framework for understanding successive generations of product intelligence, leading to a new paradigm — participatory commerce. This paradigm trains evolved market intelligence on a much larger opportunity — the triple win of merchandise economics, promotional spend, and customer satisfaction.

  • ClicktoTweet, “@IDCInsights #IDCRetailInsights Presents #BigData&Analytics Foundation for #NextGeneration #RevenueManagement – will propel #BDA”

BDA will increase revenue growth through optimized pricing, and create new opportunities to improve assortments, new products, marketing, and other demand generators. Product intelligence creates new facets of market and competitive insight through price discovery in the near term, with broader reach into assortments, private labels, and management of private label and national brands. Within five years in the context of “give-to-get” shoppers, combined with forces like supply chain collaboration among retailers and brands, self-learning intelligent agents, and autonomous event-processing, product intelligence will lead to participatory commerce.

Key highlights of the report include:

  • In 2013, approximately 50% of retailers were aiming BDA at pricing strategies, market intelligence, and customer acquisition. More retailers will join their ranks over the next two to three years.
  • Price intelligence, a subset of product intelligence, is emerging as the initial set of capabilities aligned to support these BDA initiatives. Beyond discovering prices and supporting better pricing decisions, product intelligence sheds light on competitors’ pricing strategies and tactics, assortments, localization, and channel strategies as well as on consumer decision making when combined with psychological techniques.
  • Price discovery gives retailers a countermeasure in the “spy versus spy” world of price transparency, providing them an analytical advantage but leaving consumers with the edge when comparing prices online in the context of their purchase journeys. Next-best-action analytics remain a seller’s key tool against the consumer’s contextual advantage.
  • As already evident in the 2013 holiday shopping season — supported by price discovery, predictive analytics, and real-time ecommerce price management — high-speed algorithmic pricing will break constraints on price change cadences and create breakneck “channel chess” competition.
  • In the context of supply chain collaboration, give-to-get consumers, self-learning intelligent agents, and autonomous event-processing product intelligence will create opportunities for participatory commerce — marketplaces wherein transactions based on the buying, selling, and buying intentions of participating retailers, brands, and consumers will improve merchandise economics, returns on promotional spending, and customer satisfaction.

“In particular, one application of product intelligence, price discovery, gives retailers a countermeasure versus the ‘spy versus spy’ price transparency of retail today,” said Greg Girard, program director at IDC Retail Insights. “Next-generation product intelligence in consumer decision making, competitor tactics, and market conditions will propel BDA-based revenue initiatives beyond pricing further into marketing, assortments, buying, and product development.”

For additional information about this report or to arrange a one-on-one briefing with Greg Girard, please contact Sarah Murray at 781-378-2674 orsarah@attunecommunications.com. Reports are available to qualified members of the media. For information on purchasing reports, contact insights@idc.com; reporters should email sarah@attunecommunications.com.

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With Year-on-Year Growth of 84% in the Second Quarter, India Smartphone Market Still Has Immense Potential, Says IDC

IDC PMS4colorversion 1 300x99 With Year on Year Growth of 84% in the Second Quarter, India Smartphone Market Still Has Immense Potential, Says IDC

The smartphone market in India has maintained its growth impetus with smartphone shipments achieving year-on-year growth of 84% in Q2 2014 and a quarter-over-quarter growth of 11%. The potential for future growth in the smartphone market remains quite high as 71% of the market continues to be on feature phones.

According to International Data Corporation (IDC), the overall India mobile phone market stood at 63.21 million units in Q2 2014, a 5% increase over Q1 2014. The quarter-over-quarter growth can be attributed to both product categories (i.e. smartphones and feature phones).  Back-to-back volume growth in the smartphone market is also being noted due to the re-defined, low-price smartphone models and continuous migration from feature phones to smartphones.

The Indian smartphone market grew by 84% year-on-year in Q2 2014. According to IDC Asia Pacific Quarterly Mobile Phone Tracker (excluding Japan),vendors shipped a total of 18.42 million Smartphones in Q2 2014 compared to 10.02 million in the same period of 2013. The sub-$200 category of the smartphone market is increasing in terms of new shipment share as the contribution from this category stood at 81% in Q2 2014. With the influx of Chinese vendors and Mozilla’s plans to enter the smartphone category at the $50 price level, the low-end segment of the smartphone market will become crucial in the coming quarters.

The shipment of “Phablets” (5.5 inch – 6.99 inch screen size Smartphone) in Q2 2014 was noted to be 5.4% of the overall smartphone segment. The phablet category grew by 20% quarter-on-quarter (QoQ) in terms of sheer volume. More than half of the phablets shipped were in the under-$250 price band and Indian vendors are dominant in the noted price segment.

Jaideep Mehta, Vice President and General Manager – South Asia, IDC says, “While Samsung has held on to its leadership position in the market, it is noteworthy that Micromax is growing faster. Samsung needs to continue to address the low-end of the market aggressively, and also needs a blockbuster product at the high end to regain momentum. Given the current growth rates, there is a real possibility of seeing vendor positions change in the remaining quarters this year.”

“IDC observes that a new entry level price point is being breached by the Indian home grown vendors every quarter. These devices are not equipped with high end specifications and RAM is typically 256 MB. This ultra low cost segment may not sound a viable option to the repeat buyers, but it works well on the targeted segment,” says Karan Thakkar Senior Market Analyst at IDC India.

Q2 2014 has been an exciting quarter for the players in the mobile phone market.  Among the top five vendors, Micromax and Lava were the only ones to have outstripped the market growth. The former grew by 18% and the latter by 54% in the overall phone business.  Micromax not only toppled Nokia to clinch the number 2 spot, but also created a gap between the second and third spot.

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IDC Retail Insights Arms Retailers with IoT Technology Strategy

IDC PMS4colorversion 1 300x99 IDC Retail Insights Arms Retailers with IoT Technology Strategy

IDC Retail Insights today announced the availability of a new report, “Business Strategy: Developing an IoT Technology Strategy,” (Document# RI250271), which outlines how retailers must plan now for IoT, even if IoT hasn’t made it to the top of the priorities list. According to the new report, applied IoT technology positively impacts top and bottom line business performance by improving omni-channel operations and enabling personalized and contextualized interaction with consumers. Understanding the technology landscape and defining a roadmap for IoT implementation requires uncommonly long range planning, but is rewarded with reduced long term implementation costs and total cost of ownership (TCO).

ClicktoTweet, “@IDCRetailInsights Arms #Retailers with #IoT Technology Strategy

The convergence of cloud, mobile, big data/analytics and sensors has created an opportunity for retailers to engage consumers and employees in radically new ways.  Within 5 years consumers will expect that retailers engage them with personalized and contextualized interactions. In the same time frame, if the retailer hasn’t figured out how to improve real time inventory accuracy to 98% or better, they will struggle to close the online or click and collect sale.

This report provides the following advice for retailers:

  • A definition of IoT technology
  • A thorough examination of the technology landscape for IoT (for retailers)
  • Specific steps to developing a IoT technology strategy
  • Guidance for driving retail IoT programs forward

Leslie Hand, research director, IDC Retail Insights, reports that, “Retailers can improve operations, reduce risk and loss, and wow the consumer with IoT enabled capabilities. Now is the time to establish a strategy and develop a roadmap for IoT. A well thought out plan will guide the reduced cost of ownership of IoT technologies, and enable continued agility and innovation. ”

In another new report announced today, Business Strategy: Understanding the IoT Use Cases For Retail, many of the most common use cases that are being implemented today are discussed including product tracking / traceability, interactive consumer engagement and operations, mobile payments, asset management and fleet and yard management.

The IoT journey, rich in opportunities, is also full of challenges – the biggest of which is enabling tactical applications sometimes in isolation of a plan for an architecture designed for IoT. IoT requires an event oriented paradigm, which includes listening, bi-directional messaging, information distribution, and communications over a variety of networks. The architecture for IoT stretches the limits of retail legacy networks.  When evaluating IoT technologies, IDC Retail Insights recommends retailers gain an understanding of the technology landscape for the variety of technologies and the related intersection points as soon as possible

The new report outlines specific steps to developing a IoT technology strategy and emphasizes that retailers interested in engaging the omni-channel consumer with consistent personalized and increasingly contextualized physical and digital interactions, should consider how to build an architecture for IoT that will continue to adapt to consumer interaction patterns and needs. Meanwhile, technology vendors and consultants should help retail enterprises define and understand the IoT opportunities and the path forward.

To learn more about a related IoT report announced today, please visit”Business Strategy: IoT Use Cases for Retail,”

For additional information about this report or to arrange a one-on-one briefing with Leslie Hand please contact Sarah Murray at 781-378-2674 orsarah@attunecommunications.com. Reports are available to qualified members of the media. For information on purchasing reports, contact insights@idc.com; reporters should email sarah@attunecommunications.com.

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Worldwide IT Market Showing Tentative Signs of Improvement, According to IDC

IDC PMS4colorversion 1 300x99 Worldwide IT Market Showing Tentative Signs of Improvement, According to IDC

According to the newly published International Data Corporation (IDCWorldwide Black Book (Doc #250222), recent volatility will gradually give way to a more positive outlook for IT spending in the second half of 2014. With the U.S. and other mature economies mostly heading in the right direction and a significant commercial PC refresh cycle already underway, improvements in business confidence are set to drive a moderate infrastructure upgrade cycle over the next 12-18 months, while investments in software and services will continue to accelerate.

  • ClicktoTweet:  According to @IDC #WorldwideITMarket showing signs of improvement – spending forecast to increase by 4.5% at constant currency 2014

Worldwide IT spending is now forecast to increase by 4.5% in 2014 at constant currency, or 4.1% in U.S. dollars. A significant proportion of this growth is still being driven by smartphones – IT spending excluding mobile phones will increase by just 3.1% this year in constant currency (2.8% in U.S. dollars). Aside from smartphones, the strongest growth will come from software, including rapidly expanding markets such as data analytics, data management, and collaborative applications including enterprise social networks. The 3rd platform pillars of Big Data, Social, Mobile and Cloud will continue to drive virtually all of the growth in IT spending, while spending on 2nd pPlatform technologies will remain effectively flat.

Meanwhile, although some emerging markets remain constrained by macroeconomic and geopolitical wild cards, there is now significant pent-up demand for IT investment that will drive stronger growth next year in markets including India, Brazil, and Russia. Pent-up demand has already driven a significant rebound in both consumer and enterprise IT spending in China this year, as confidence stabilizes. While mature economies are still driving the upside in 2014, emerging markets will once again dominate in 2015.

Cold Snap and Wild Cards Impacted IT Spending, But Underlying Demand is Strong

Some IT market segments performed weaker than expected in the first quarter of 2014 (1Q14), in line with the weather-related slowdown in U.S. output and the impact of wild card events including the conflict in Ukraine. In particular, an overdue enterprise infrastructure refresh cycle was disrupted by short-term declines in business confidence. However, strong underlying demand for this investment cycle will drive improvements in the server, storage, and network infrastructure markets in the coming months.

“At the beginning of 2014, we asserted that businesses would choose to fix the roof while the sun was shining,” said Stephen Minton, Vice President in IDC’s Global Technology & Industry Research Organization (GTIRO). “Unfortunately, the weather was literally much colder than expected during the first quarter. The good news is that the U.S. economic outlook has already brightened and this will drive a period of moderate but long-awaited investment in mission-critical infrastructure over the next year. However, accelerating adoption of cloud services will continue to impact sales of traditional on-premise equipment, packaged software, and IT services. This capital spending cycle will be mild by historical standards.”

PC Refresh Stronger than Expected in Mature Economies, Tablet Shipments Weaker

The commercial PC refresh has proven stronger than originally forecast. As a result, IDC now forecasts PC spending will increase by 3.5% in 2014 (the fastest pace since the post-financial crisis rebound of 2010). Western Europe has also seen an improvement in PC shipments, although PC spending in Europe will still be down by 1% due to average price declines. The PC cycle has already driven a market upturn in Japan, where economic growth and upcoming tax increases drove a surge in capital spending in 2013 (PC spending in Japan increased by 6% last year, but will decline by -4.5% this year).

“The end of support for Windows XP is obviously part of the story, but there has also been a transition of some spending from tablets to PCs as consumers and businesses have allocated disposable income and IT budget to replacing older notebooks and desktops rather than upgrading their relatively new tablets,” said Minton. “The tablet market is also more sensitive to economic wild cards and price competition, now that penetration rates have increased. There’s still plenty of growth ahead for tablets, however, and it would be premature to say that improvements in the consumer PC market represent anything like a reversal of the long-term shift to tablets and hybrids over the long term.”

The U.S. tablet market is now forecast to increase by just 2% this year, but will rebound to 7% growth in 2015 as the PC cycle begins to wane. Worldwide tablet spending has slowed from 29% year-over-year growth last year to 8% in 2014, but will accelerate back to double-digit growth next year (10%). Penetration rates in emerging markets such as China will continue to increase, while some enterprise spending will shift back to tablets.

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Reports of the iPad’s Demise Are Greatly Exaggerated

Mashable

The tablet is dead. At least, that’s what an array of breathless news reports would have you believe. Yes, it’s true that tablet sales are on the decline in many markets and growing slower than others. But don’t believe the unhype; the tablet isn’t going to suffer the same fate as the netbook.

Apple on Tuesday announced its third quarter 2014 earnings. And in what has become a trend, iPad sales failed to meet analyst expectations. Perhaps even more troubling, sales of the iPad were actually down year-over-year, a rarity in a growing market.

Looking at these figures, you can see that although the iPad is still boasting big sales — especially during the holiday quarter — it isn’t continuing to sell in the numbers many analysts predicted it would.

During the earnings call, Apple CEO Tim Cook attributed the slower sales in part to “market softness in certain parts of the world,” primarily in the United States and Western Europe.

Tablet growth is slowing in developed markets

Apple isn’t the only company seeing a year-over-year decline in tablet sales. According to IDC, the worldwide tablet market grew 11% year over year, but declined sequentially from the first quarter of 2014 by -1.5%.

At the end of May, IDC updated its 2014 worldwide tablet forecast to a growth rate of 12.1% year-over-year. In contrast, tablet sales worldwide grew 51.8% year-over-year in 2013. In other words, the big boom of tablet sales’ glory days are over.

At least, that’s what some pundits and analysts are espousing. And although its true that tablet sales aren’t growing at the same rate in which they were (and are contracting in certain markets, such as the U.S.), that doesn’t mean the category as a hole was a failure or is doomed.

During the earnings call, Tim Cook spoke at length about the slowing iPad sales. He made it a point to note that

“One other point I might add on this, because I think this is interesting,” Cook said. “The market’s very bifurcated on iPad. In the BRIC [Brazil, Russia, India and China] countries, iPad did extremely well. The growth was very high. Like in the China it was [about 50%], in the Middle East it was [about 60%]. Luca may have mentioned those numbers. In the developed countries like the U.S., the market is clearly weaker there.”

Part of the reason that growth might be slowing — or declining — in the United States may simply be a factor of faster market penetration.

According to the Pew Internet Project’s research related to mobile tech, 42% of adults own a tablet computer. That compares favorably with the 58% of American adults that have a smartphone. When once considers that the tablet market is much newer than the smartphone market, the fast adoption rate is likely one reason growth has slowed faster too.

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Worldwide Tablet Market Grows 11% in Second Quarter on Shipments from a Wide Range of Vendors, According to IDC

IDC PMS4colorversion  300x99 Worldwide Tablet Market Grows 11% in Second Quarter on Shipments from a Wide Range of Vendors, According to IDC

The worldwide tablet grew 11.0% year over year in the second quarter of 2014 (2Q14) with shipments reaching 49.3 million units according to preliminary data from the International Data Corporation (IDCWorldwide Quarterly Tablet Tracker. Although shipments declined sequentially from 1Q14 by -1.5%, IDC believes the market will experience positive but slower growth in 2014 compared to the previous year.

“As we indicated last quarter, the market is still being impacted by the rise of large-screen smartphones and longer than anticipated ownership cycles,” said Jean Philippe Bouchard, IDC Research Director for Tablets. “We can also attribute the market deceleration to slow commercial adoption of tablets. Despite this trend, we believe that stronger commercial demand for tablets in the second half of 2014 will help the market grow and that we will see more enterprise-specific offerings, as illustrated by the Apple and IBM partnership, come to market.”

Despite declining shipments of its iPad product line, Apple managed to maintain its lead in the worldwide tablet market, shipping 13.3 million units in the second quarter. Following a strong first quarter, Samsung struggled to maintain its momentum and saw its market share slip to 17.2% in the second quarter.  Lenovo continued to climb the rankings ladder, surpassing ASUS and moving into the third spot in the tablet market, shipping 2.4 million units and grabbing 4.9% markets share. The top 5 was rounded out by ASUS and Acer, with 4.6% and 2.0% share, respectively. Share outside the top 5 grew to an all time high as more and more vendors have made inroads in the tablet space. By now most traditional PC and phone vendors have at least one tablet model in the market, and strategies to move bundled devices and promotional offerings have slowly gained momentum.

“Until recently, Apple, and to a lesser extent Samsung, have been sitting at the top of the market, minimally impacted by the progress from competitors,” said Jitesh Ubrani, Research Analyst, Worldwide Quarterly Tablet Tracker. “Now we are seeing growth amongst the smaller vendors and a levelling of shares across more vendors as the market enters a new phase.”

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Google continues to play it close to the vest on mobile ads

VentureBeats

Before Google’s earnings announcement today, many investors and analysts were hoping for details on progress in building and monetizing the massive corporation’s mobile ad network.

It’s an area of Google’s business that continues to see a lack of sunlight, even though it may be the most promising sector that the company’s playing in today.

True to form, in its earnings announcement today, Google again reported mobile ad revenues in a bundle with other ad business lines. Paid clicks from ads served through Google’s AdSense for Search, AdSense for Content, and AdMob businesses (that’s the mobile part) increased approximately 9 percent over the second quarter of 2013 but decreased 5 percent over the first quarter of 2014.

But we really don’t know much about the volume, price, or profitably of Google’s mobile ad business.

“Google has tended to take a holistic approach to advertising,” IDC analyst Scott Strawn tells VentureBeat. They tend to talk about ad results in terms of many different devices, Strawn says, but he wishes the company would talk about mobile cost-per-click numbers specifically.

“They’ve been successful in search and display, but in fact, over time, monitization on mobile should be as good or better,” says IDC analyst Scott Strawn. “But we haven’t really seen more detail, and that’s what’s needed to give investors a greater level of comfort.”

And, of course, when a public company is vague on the results of a business line, the natural reaction is to wonder if it’s hiding an area of poor performance. That skepticism may be warranted. Strawn says he’s talked to Googlers who have said openly that Google was “caught off guard” by the rapid growth in demand for mobile ads.

And, Gartner analyst Andrew Frank says, the industry reasons to believe that Google is facing challenges in mobile.

“It’s an interesting place to watch, especially with the tradeoff about volumes going forward and pricing pressure on clicks, which have been fairly volatile,” Frank told VentureBeat.

Frank explains that the mobile ad market is ruled by a supply-and-demand dynamic: The number of mobile users is going up, but the amount of mobile ad inventory may be increasing even faster. When there’s more inventory than people to view or click, the price of the inventory goes down, and mobile ad profits decline.

Google CFO Pachette said during the earnings call that he “took issue” with a question from an analyst concerning specific results of the mobile ad business.

The research shows that consumers view content on multiple screens, Pachette said. “They might start something on a smartphone or tablet then watch the rest on a smart TV.”

“So it becomes a question of how much attribution to give to each of these elements in the chain of views moving toward a purchase,” Pachette said. “What really matters is that you have a footprint of all of these devices.”

Google doesn’t feel the strong sense of urgency that Facebook felt when it dove into the mobile ad business. Facebook has been successful in mobile ads, the numbers show. Two years ago, people were criticizing the social network for having “no mobile strategy.” Today, mobile ads contribute half of Facebook’s revenue.

Google, meanwhile, is taking its time in what it sees as a developing market. “There’s long runway going forward,” Pachette said today. “I don’t think we have to fear the saturation of smartphone penetration for a while.”

PC Shipments in EMEA Return to Growth in 2Q14, Says IDC

IDC PMS4colorversion  300x99 PC Shipments in EMEA Return to Growth in 2Q14, Says IDC

According to International Data Corporation (IDC), PC shipments in Europe, the Middle East, and Africa (EMEA) reached 21.9 million units in the second quarter of 2014 — a 10.5% increase year on year and a clear return to growth after seven quarters of consecutive decline. As in the previous quarter, Western Europe drove most of the regional growth, with shipments supported by strong enterprise renewals, which led to an overall 25% increase in the PC market. Consumer shipments also returned to growth after a severe contraction in 2013. At the same time, Central and Eastern Europe (CEE) remained impacted by the unstable political and economic situation in Russia and by currency fluctuations; as forecast, CEE declined by 13.2%. The Middle East and Africa (MEA) posted a modest 1.9% increase in shipments. In line with those trends, portable PC shipments in EMEA returned to growth (up 8.3%), while desktop PC shipments increased 14.1%. The increase in total EMEA shipments indicates a rebound in the market but not a recovery as volumes remain below the 25 million unit mark of the peak periods in 2010 and 2012.
“The clear improvements in EMEA are positive signs for PC manufacturers,” said Chrystelle Labesque, research manager, IDC EMEA Personal Computing. “However, there was still a big difference between the subregions, and especially in the consumer segment the divide between mature and emerging markets is similar to the worldwide trend. While some parts of the CEMA [Central and Eastern Europe, Middle East, and Africa] PC market continued to suffer from unfavorable exchange rates and a difficult political situation, Western European shipments were fueled by low-end consumer notebooks. Even if the comparison is eased by a very poor second quarter of 2013, more attractive products at the right price points encouraged more consumers to renew their devices. Retailers and etailers also seem more confident as new product designs and features better positioned price-wise are now generating higher sales and not only just interest. Promotional activities and vendors’ preparation for the back-to-school period further supported the market. The level of inventory will have to be monitored closely as back-to-school sales progress during August and September.” In this context, Chromebooks continued to grow, but their impact is limited to several countries in Western Europe.
PC shipments in Western Europe have continued to benefit this quarter from ongoing renewals in the SMB space following the end of Windows XP support. Commercial demand remained strong as business confidence stemming from an improving macroeconomic outlook contributed to corporate renewals. Commercial PC shipment growth in Western Europe reached 26.9% — clear confirmation that PCs remain key productivity tools in the enterprise environment. At the same time, the rebound in consumer shipments accelerated and some markets, including southern Europe, returned to levels of business close to their capacity. Shipments in Spain, Germany, and the Netherlands took off, with sell-in up by more than 40%.
“The lack of investments in PC renewals during the past two years contributed to an aging installed base across the commercial market and, together with the end of Windows XP support, this generated large renewal needs,” said Maciej Gornicki, senior research analyst, IDC EMEA Personal Computing. “As the macroeconomic outlook improved in most Western European countries, large enterprises regained confidence and started to replace their PCs, while many companies in the SMB segment reacted late to the change in the operating system. This has mainly boosted demand for desktops in the past two quarters, while the wave of portable renewals remains ahead of us.”

The Rise of Cloud in the Channel

IDC PMS4colorversion 1 300x99 The Rise of Cloud in the Channel

Cloud services represent a growing opportunity for partners of all types in a wide array of activities across resale, services, and development. However, it’s of key importance that partners have an understanding of the what, where, how, and why of cloud services prior to embarking on wholesale business strategy change.

This IDC study, commissioned by Microsoft, examines the implications of becoming a successful cloud partner in 2013. Developed with insight garnered through in-depth conversations with leading Microsoft cloud partners and backed by supportive survey data (see methodology for further details), it provides a profile of the potential upside of integrating cloud to a partner’s mix of solution offerings.Finally, it concludes with guidance as a partner begins, or continues, their journey into the cloud.

the rise of the cloud in the channel The Rise of Cloud in the Channel

Digital Transformation Era Projects a Promising Future for Enterprise Applications Software, Says IDC

IDC PMS4colorversion 1 300x99 Digital Transformation Era Projects a Promising Future for Enterprise Applications Software, Says IDC

The Asia/Pacific excluding Japan (APeJ) Enterprise Applications (EA) software market posted a mediocre growth of 5.1% in 2013. Unlike 2012, when the EA market grew 9%, Asian enterprises were more cautious about their investment in 2013. Although organizations were keen in upgrading existing back-office applications to embrace the 3 rd platform technologies – cloud, analytics, mobility, and social – watchful spending strategy of customers and the ad hoc nature of deployments did not warrant for sustained growth in 2013.
“The 3 rd platform technologies, especially cloud, will be a critical driver for enterprise applications growth in APeJ.  Enterprises are moving from an ad hoc deployment of cloud-based applications and other 3 rd platform technologies, to a phase of strategic implementation. This new era of digital transformation and the speed of innovation of Asian businesses is expected to bring the market back on track in 2014 and through the forecast period,” says Sabharinath Bala, Research Manager of IDC’s Asia/Pacific Enterprise Application Software Research.
It was the usual suspects – SAP, Oracle, Yonyou, Infor, and Microsoft – that dominated in the region from a market share perspective, but most of these major vendors were challenged strongly by niche new players as well as the established SaaS/Cloud-based applications vendors. Some of the names noteworthy of mentioning include Cornerstone OnDemand, Kronos, NetSuite, Workday, and Xero – all of which posted strong double-digit growth in 2013.
“Although most of the major vendors have been creating new internal IP, as well as acquiring assets and expanding their cloud capability inorganically, the challenge of integrating these new resources with their existing portfolio and convincing clients and prospects to take the cloud path remained critical in attracting newer EA investments. But this scenario is slowly changing and vendors that rely primarily on maintenance and upgrade revenue for their existing legacy systems will start losing relevance in the coming days. Vendors offering cloud-based systems capable of delivering the agility, flexibility, and scalability of the dynamic Asian businesses, will trump them in their own game,” adds Sabharinath.
IDC expects the overall EA market to grow at a compound annual growth rate (CAGR) of 8.4% and reach US$9.5 billion in 2018. Double-digit growth is expected from markets like enterprise asset management, logistics, and procurement; and there will be strong support from mature markets like financial accounting, human capital management, and inventory management.