Asia Pacific's enterprise software market revenue is forecast to reach $22.1 billion in 2010, posting 10.2 per cent growth, according to information technology research and advisory firm Gartner, Inc.
This represents an upturn from the expected 6.6 per cent growth in 2009, which is a notable slowdown compared to 2008 growth of 13.8 per cent. Within the region, the volatile economy is impacting the application software segment more than the infrastructure software segment.
Despite the recent slowdown in growth, Asia Pacific still has a positive outlook over the five-year forecast period from 2008 through to 2013, achieving a compound annual growth rate (CAGR) of 10.8 per cent, the highest of any region worldwide.
For the next five years, China, India and Vietnam would continue to register the highest CAGRs (14.6 per cent, 12.4 per cent and 10.7 per cent respectively). Mature markets Australia and Singapore would also have attractive CAGRs, of 9.5 per cent and 9.4 per cent, respectively.
China and India continue to benefit from a large domestic customer base and government stimulus packages, as well as relatively low market penetration.
Australia and Singapore's revenue is supported by a consistent maintenance revenue stream and a strong vendor channel and service infrastructure, as well as positive expectations for end-user software budget increases in 2010.
China would continue to lead software demand in the region, with a 12.2 per cent growth rate in 2009 and 14.5 per cent growth in 2010. Although China's high dependency on exports is significantly impacting its economic growth in 2009, government's stimulus package cushions the negativity.
Australia is the next-largest market with a 5.4 per cent growth rate in 2009 and 8.2 per cent growth in 2010. Although some mature countries are experiencing a notable recession, Australia's economic growth in 2009 would experience only slight negative growth before picking up in 2010.
Despite experiencing the slowest growth in 2009 among the region's four largest markets at only two per cent, South Korea is still the third-largest software market in Asia Pacific.
South Korea is a well-developed and IT-savvy market and revenue would come from its large installed base,specifically from maintenance and upgrades. Notable software growth improvement at 6.5 per cent is expected for South Korea in 2010, according to the firm.
India is the fourth-largest market in the region with expected growth of 10.1 per cent in 2009 and 11.8 per cent growth in 2010. While its economy is also impacted by the economic downturn, India has the advantage of being less dependent on exports than China. India's largely untapped market, combined with a strong pool of IT skills, is expected to uphold local software demand.
Infrastructure software represents 64.4 per cent of enterprise software spending in Asia Pacific in 2010. The bulk of infrastructure software spending is made up of operating systems, database and security software segments. Data integration tools and virtualisation software would have the fastest CAGRs in the next 5 years.
Although application software spending would have a slower growth rate than infrastructure software spending, during the next five years it is projected to grow at a solid 9.9 per cent, the firm said.
ERP and office suites would remain the largest segments throughout the forecast period. While Web conferencing and project and portfolio management (PPM) would have the fastest CAGRs.
