Major investment in public cloud software will see worldwide revenue for enterprise applications to rise to $385.2 billion by 2026, according to a report released this week by industry analysts International Data Corporation (IDC).
Global revenue for enterprise applications stood at $279.6 billion in 2022, meaning that the expected amount for 2026 will represent a five-year compound annual growth rate of 8 per cent.
“It’s no longer enough for businesses to sit back and rely on their technological debt of software and hardware assets to keep the company running,” research director of Worldwide Digital Commerce at IDC Heather Hershey said.
“In the digital world, enterprise software needs to constantly innovate to keep up with demand for speed, scale, and a resilient business,” Hershey added.
The company explained the that entire process of migrating on-premise applications to the cloud can take a great deal of time, several years in some cases, this will deter neither customers nor vendors from carrying on with this transition, which is seen as a crucial part of business operations moving forward.
What is more, IDC said that organisations and businesses that do not implement cloud-based enterprise software strategies will incur severe opportunity costs, seeing as their rivals will continue to progress with their own cloud software transition plans.
“Organisations must invest in new tools to keep their application portfolio up to date as they move into the digital era, automating all processes while also leveraging innovation and a wealth of data to become a more creative and resilient company in the digital realm,” Hershey stated.
Aside from the cloud migration that businesses are implementing across the globe, IDC also outlined various other major developments in the market that are also contributing to the growth of the enterprise applications market.
Among these is that software-as-a-service (SaaS), as well as modular applications, are now crucial, must-have tools for businesses, rather than the luxury they used to be perceived as.
“Organisations that want to stay in business need AI-driven software that is cloud-enabled, modular, and intelligent,” IDC said.
Moreover, the company also acknowledged the importance of application programmable interface technology (APIs), the phasic migration to the cloud combined with the use of automated task-based applications, as well as new global regulations around data privacy and ethics, something has undoubtedly affected the way businesses approach data collection.
“The digital world is completely altering the way software is utilised and incorporated into the organisation from modularity to APIs to low code or no code to business process automation to TaskApps and even with innovation,” group vice president of Enterprise Software at IDC Mickey North Rizza said.
“Organisations are stretching their visions from filling technology gaps to optimising processes globally to going the last mile with complete differentiators for their clients,” he added.
“The business world is finally starting to leverage the opportunity technology brings to it,” Rizza concluded.
