Prices increases will accelerate slightly due to increased demand but will still remain relatively small due to the increased use of cloud computing and open source software
Los Angeles, CA (PRWEB) April 02, 2014
Enterprise content management (ECM) systems have a buyer power score of 3.5 out of 5.0. This score reflects positive but somewhat limited negotiation power for buyers. “Favorable pricing trends and low market risks help increase this score, while a negative market structure limits it,” says IBISWorld procurement analyst Andrew Yang.
Pricing trends have been fairly favorable for buyers because prices have remained fairly stable in the three years to 2013. Demand has increased in response to the economic recovery. “Businesses are being created and investments in software have increased,” says Yang. In addition, internet traffic volume has surged, indicating an increased volume of data that will require enterprise content management systems to manage and organize, but the developments in cloud computing and open source software have moderated price increases. This has lowered barriers to entry, increasing competition in the market and placing pressure on suppliers to keep prices low. These trends are expected to continue, helping keep prices stable in the three years to 2016.
Buyers also benefit from relatively low market risks. Most ECM system providers are well-established software publishers with very low financial risks. In addition, providers are not dependent on any critical inputs for the development and delivery of their products. These low market risks indicate that buyers can expect that delivery of ECM systems will not be disrupted by providers undergoing financial difficulty or providers unable to obtain critical inputs. This factor is especially for important for buyers because they will be dependent on their provider to perform service and maintenance after purchase.
A negative market structure significantly lowers the buyer power score. ECM systems are very complex software systems that require significant technical expertise, manpower and financial resources to develop and deliver. As a result, it is a very specialized product with a relatively small number of suppliers that can deliver the product. There are very few substitutes with the same functionality and features of a dedicated ECM system. Switching costs are very high, increasing the risk that the buyer may get locked in with a supplier. Major suppliers include International Business Machines Corporation, OpenText Corporation, EMC and Microsoft Corporation.
For more information, visit IBISWorld’s Enterprise Content Management Systems procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of enterprise content management (ECM) systems. ECM systems help businesses store, manage and access their unstructured content, which includes emails, documents, media and records. ECM systems help businesses lower costs and increase efficiency by consolidating and organizing their information and data. This report excludes web content management systems and database software.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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