The shift to cloud computing, the rise of open-source solutions and the ongoing adoption of hybrid cloud models will continue to change the dynamics of the global enterprise software market.
Emerging applications with significant new compute and storage requirements, such as Big Data analytics, will most likely migrate to cloud service platforms.
The shifting demand has a resulting effect on traditional software licence sales growth. International Data Corporation (IDC) released the latest forecast from the Worldwide Semi-annual Software Tracker.
For 2014, the worldwide software market is forecast to grow 5.9 percent year over year in current US dollars (USD). In constant USD the growth rate has been revised to 5.7 percent -- that's down from the 6.2 percent year-over-year growth forecast in November 2013.
IDC believes that the compound annual growth rate (CAGR) for the 2013-2018 forecast period will remain close to 6 percent.
Structured Data Management Software, Collaborative Applications and Data Access, Analysis and Delivery solutions are expected to show the strongest growth over the five-year forecast period with a CAGR near 9 percent from 2013-2018.
"Leveraging the social dimension of the Internet keeps fueling the Collaboration growth, much of which is in the form of Software as a Service (SaaS). This is complementary to the increased attention to Big Data and analytics solutions, which help enterprises understand and act on anticipated customer behavior and new insights into product reliability and maintenance", said Henry Morris, senior vice president at IDC.
In the Enterprise Applications category, Customer Relationship Management, Enterprise Resource Management, Supply Chain Management, and Operations and Manufacturing Applications will continue to show CAGR rates around 6 percent.
Enterprises are starting to implement applications that either didn't exist or weren't needed in the past, such as commerce applications in all industries, not just retail, but also manufacturing, hospitality, food and beverage, and even the public sector.
"IDC is also seeing applications in categories that didn't exist in the past (e.g., subscription billing, spend optimization, and revenue management) for requirements that may have been met using custom applications or manual processes," said Christine Dover, research director at IDC.
On a regional basis, the emerging economies will continue to experience stronger growth than the mature economies.
The average 2013-2018 CAGR for Asia/Pacific (excluding Japan), Latin America, and Central Eastern, Middle East, and Africa (CEMA) is 8.5 percent while the average CAGR for the mature regions -- North America, Western Europe, and Japan -- is 5.9 percent.