Market for e-procurement software remains strong

4 November 2008
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04 November 2008 | Paul Snell

Experts predict strong growth in the market for e-purchasing software will continue, despite a slowdown in the overall market for IT applications.

According to a report by Forrester Research, it expects revenues at e-purchasing vendors to grow by around 17 per cent this year. This is down from 24 per cent in 2007, but well above the 8 per cent rate of growth predicted for global software sales.

The report estimated that around 12,000 firms had implemented e-procurement, with around 10,000 planning to. The study also said that while America continues to be the biggest market for e-purchasing software, the EMEA region is catching up. Examining average growth in the market from 2004, including estimated performance up to 2009, Forrester said the market in the Americas has grown an average of 16 per cent a year, while EMEA averages an 18 per cent in the same period.

Strong demand means revenues from clients have remained steady. The study found that for some elements of e-procurement, such as e-sourcing, prices for reverse auction, request for quotation and request for information software are falling as they become more commoditised.

The report described the supplier market as "two big fish with many other fish in the sea". Oracle and SAP continue to dominate, but there is a "long tail" of smaller vendors that have combined revenue that is three times higher than Oracle and SAP's total market share. Smaller suppliers are also growing more quickly than the bigger players. Specialist providers IQNavigator and Fieldglass grew by 61 per cent and 59 per cent compared with the previous year.



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