Enterprise Application Suite Software Growing In Russia

The Russian market for enterprise application suite (EAS) software expanded 21% in 2005 to $236 million in license and maintenance revenue and is expected to grow by more than 28% this year, according to a recent IDC study.

Increased competition and strong economic development created an environment in which end-user companies were ready to invest in IT, according to the study.

Chemicals and process manufacturing accounted for the majority of EAS spending last year -- 35%. The second and third largest verticals, discrete manufacturing and communications, both contracted. Together, these three sectors accounted for nearly 55% of the market.

"Over the next few years exports of chemicals and petroleum products will continue to increase, creating a capital base for additional investments in EAS software," said Elena Semenovskaya, research manager, Software, IDC Russia. "Moreover, many firms are looking to expand operations not just into the rest of the CIS but also abroad in places like the Middle East, China, and Western Europe. They are also looking to launch IPOs on foreign stock exchanges and acquire or merge with other international companies, requiring further development of EAS solutions to facilitate adherence to international standards and practices."

Enterprise resource management (ERM) software accounted for nearly 49% of EAS revenue in Russia last year. Demand was high among both SMBs seeking to automate accounting and large firms getting ready to launch IPOs or receiving large volumes of foreign investment. Supply chain management represented the second-largest group of solutions on the Russian market with operations and manufacturing applications coming in third.

"ERM was the fastest growing functional area in Russia in 2005," said Semenovskaya. "This will start to change this year, however, as the high end of the segment is saturated and users will seek to expand to other areas, particularly into customer relationship management and business analytics."

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