Mounting competition and the rising prevalence of software-as-a-service models will continue to push ERP software prices down during the three years to 2016.
Los Angeles, California (PRWEB) February 08, 2014
Enterprise resource planning (ERP) software has a buyer power score of 3.6 out of 5.0. “This score reflects positive pricing and market trends that give buyers some, albeit limited, flexibility, to negotiate from historically low prices,” says IBISWorld procurement analyst Nikoleta Panteva. The ERP market is still a seller's market; high switching costs, high market share concentration, the lack of substitutes and contract stipulations give vendors significant pricing power. Major vendors in this market include Intuit Inc., Microsoft Corporation, Oracle and SAP AG.
During the past three years, underlying technology trends have opened the door to new market entrants with disruptive business models that have raised competition levels and driven prices down. The maturation of internet-based (or cloud-based), social and mobile technologies have also pushed the ERP software market toward lower-priced software-as-a-service (SaaS) models that have driven down average license prices and reduced the total cost of ownership for buyers. “Furthermore, increasing buyer sophistication and preference for lower SaaS pricing models has put further downward pressure on prices,” adds Panteva.
The average license price is forecast to continue declining during the three years to 2016. Buyers' further adoption of SaaS pricing models and the corresponding slowdown in new product development will continue driving down prices, despite demand for industry software increasing as its value proposition improves. ERP software is expected to display a convergence in functionality with other enterprise software categories, such as customer relationship management and business intelligence software to create a single enterprise-wide IT system capable of managing all business functions.
For more information, visit IBISWorld’s ERP Software procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report covers finance, accounting and enterprise resource planning (ERP) software products that improve and automate core back-office financial and managerial accounting business functions. There is a high degree of overlap in the enterprise software application market between ERP software and complementary business software that addresses back- and front-office business functions, such as sales and marketing, customer relationship, procurement, human resources and project and inventory management. The core focus of this report, however, is on the ERP software vertical of the enterprise application market.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.