Enterprise application software to break $200bn mark

Latest figures from Gartner say market spending will go from $150bn in 2015 to $201bn by 2019

Global spending on enterprise application software is set to break the $200bn (£130bn) mark, according to the latest figures from Gartner.

The worldwide enterprise application software market will grow by 7.5 per cent annually to hit $150bn in 2015 and rise to $201bn by 2019, Gartner said. This growth will be driven by digital transformation projects, functional expansion and modernisation.

Bianca Granetto, research director at Gartner, said: "The majority of spending is going towards modernising, functionally expanding or substituting long-standing business and office applications with cloud-based software-as-a-service."

Marketing, e-commerce and advanced analytics software were highlighted as market sub-segments demonstrating the biggest growth, according to Gartner.

The analyst also highlighted a number of key areas of change in the market, including transitioning to subscription-based models.

Gartner noted that cloud is set to hit a "tipping point", with 60 per cent of businesses set up for the cloud by 2020.

"From a revenue growth perspective, the widespread move from on-premise to cloud office will disrupt the traditional revenue flow as more organisations pay smaller increments over a longer period of time," the analyst said.

Gartner also predicted that by 2020, 75 per cent of businesses will use advanced analytics, as the shift moves from measurement to analysis and optimisation.