After posting significant gains for a 3-4
years the ERP market may be heading towards a slowdown. Except for SAP most other players
have witnessed a slowdown in revenue growth.
The main constraints to growth for the sector
can be classified as:
Saturation of the certain horizontal applications including
Finance and accounting, MRP etc which accounted for nearly 45% of the ERP revenues during
Saturation of large customers. Most of the Fortune 500
companies and companies having revenues over $1bn have already implemented ERP.
Though the medium enterprises provide a good opportunity for
growth, pricing for these companies will have to be highly competitive and margins may
come under pressure. Thus smaller players who have a cost advantage will have an edge over
With the Y2K round the corner, companies decision pattern
have taken a shift more towards Y2K and EURO related issues rather than ERP and most CIOs
have postponed their decision.