ERP market set to take a hit, while CRM booms, says IDC

The analyst reveals that 21% of respondents said their ERP spend would be lower or much lower in 2009 than in 2008. France will be particularly hard hit, although the Nordics and Germany will feel less impact. Additionally, larger manufacturers, with more than 2,500 employees, will be most vulnerable to ERP spending cutbacks. However, Bo Lykkegaard, research director, European Software and Services at IDC, says that it appears average spending in 2009 will be maintained for all other software types – including security software, storage software, databases, systems management and systems software. "For ERP vendors in Europe, 2009 will no doubt be a very hard year, particularly for those selling in the large enterprise segment," he says – adding: "Those ERP vendors that post positive growth during 2009 will increase their market share." Looking at other IT investments, he says: "It is interesting to see how CRM, which declined two years in a row after the recession at the beginning of the millennium, is looking much stronger during this crisis. We see many organisations investing in sales force automation, e-commerce, Internet-based marketing, loyalty management and customer self-service, as a way to bring down the cost of doing business." Lykkegaard says that fits well with IDC's overall findings that, although IT cost reduction is the most popular IT priority for 2009, it was still only selected by 23% of respondents – meaning 77% have other priorities. "The survey shows that between a third and a quarter of respondents are entering survival mode in which reductions in IT costs and IT project cancellations are a way to survive the economic crisis," says Lykkegaard. "However, we also see a large segment of the market making proactive IT investments to automate processes and increase the level of efficiency inside and outside the IT department."