EAS Revenue Will Pass $1 Billion Mark in Central and Eastern Europe by 2007

IDC: The markets for enterprise application suites (EAS) in Central and Eastern Europe are hot. 2005 was another banner year for EAS investments in the region. IDC expects license and maintenance revenue to continue to rise by an annual average of more than 18% through 2009, with annual value passing the $1 billion mark in 2007.

It's an exciting time to be in the markets. The combination of newly opened borders and increased foreign investment in everything from banks and telecommunications providers to manufacturers and retail outlets is spurring activity that requires effective IT and management tools, like EAS.

Russia is both the largest EAS market in the region and the fastest growing. With L&M revenue hitting almost a quarter billion dollars in 2005, the country accounts for nearly 37% of the total EAS market in CEE. The surge in oil prices and the increasing purchasing power of the citizenry has set the economy ablaze, making capital available for both large companies and SMEs looking to install or upgrade EAS systems.

Although the central government put a hold on a number of EAS projects last year, anticipated administrative reforms should lead to noteworthy IT investments, making the government the nation's fastest growing vertical sector for the foreseeable future, though it is starting from a relatively small base,the second largest country market in terms of license and management (L&M) revenue. The open borders and increased investments brought by EU accession proved to be a boon to the country, with a variety of funding and incentive programs encouraging increased investment in IT. Small and medium-sized businesses in particular have benefited, acquiring EAS systems as part of IT development plans designed to increase competitiveness.

In Poland, more than 40% of all EAS customers are small businesses and about 38% are medium-sized and this is where we will see the most future growth. This doesn't necessarily mean these segments are the most lucrative. Very large businesses account for about 4% of EAS customers but nearly a quarter of revenue, meaning providers still need to maintain the right balance of accounts to fully tap the country's potential.

Other hot markets include Romania, Slovakia, and Ukraine. IDC expects L&M revenue in all three countries to rise by an annual average of 17% to 20%, with liberalization and privatization the primary forces encouraging investment, development, and overall economic growth.

We can't let these figures pull our attention from the region's more mature markets Even where revenue is growing the slowest, it is still growing at a rate that would make Western European countries blush. For instance, EAS has been around for years in the Czech Republic and Slovenia, but L&M revenue will still increase at an annual average of around 11% through 2009. That's substantial. The two countries are simply bordering markets that are growing faster.

EAS Report Series for Central and Eastern Europe Publ 20060612