Explore trends that are expected to impact enterprise strategies in the coming 3 years: 2023-2026.
Even during economic downturns, the enterprise software segment remains resilient due to its ability to make a company’s business operation efficient and cost-effective. Without the right software tools, companies risk suffering huge losses: increased operational costs, reduced productivity, errors, missed opportunities, and the inability to meet customer demands.
Align your technological strategy with the IT trends and forecasts to have a clear action plan to cut costs, boost profits, and expand your business.
We studied the recent report by Statista and gathered top insights and patterns for you to consider when outlining your digital transformation roadmap.
IT Spending and Investment
Analysts are anticipating continued growth in IT spending and investment, which is a factor that organizations need to consider as they plan their budgets.
A significant portion goes into IT and communication services for various business functions. Unified communication, for instance, is pivotal for enhancing employee connectivity and productivity in a virtual work environment.
Dominance of Enterprise Software
In 2022, global spending on enterprise software reached $783 billion, marking a 7.1% growth from the previous year. This segment of the IT industry has consistently displayed robust increases, with revenues more than doubling between 2010 and 2020. Even the global pandemic failed to slow down this upward trend.
By the end of 2023, the enterprise software dominance is expected to continue, with projected spending reaching $856 billion.
Brief overview of the enterprise software segments:
- Business Intelligence and Analytics software applications global market reached $16.39 billion and is expected to attain $18.5 by 2026.
- Content Management software applications is expected to show slow but gradual growth from $48.9 billion in 2023 to $50.5 billion by 2026.
- CRM Software market revenue is forecast to grow from $54,7 billion (2023) to $58,8 billion in 2026.
- ERP Software market,being the largest enterprise software segment in terms of revenue, is expected to grow to an impressive $108,8 billion by 2025.
- There is also projected a steady grow in emerging segments like enterprise performance software management (EPM) software, social and collaboration software, security software, and product lifecycle management (PLM) & engineering software markets.
Explore the graphs below to get a deeper understanding of segments behavior.
Business Intelligence & Analytics Surge
The BI and analytics software applications market is on a positive trajectory. In 2023, it is expected to reach $16.4 billion, and by 2025, it is forecast to grow to $17.6 billion. For business leaders, this surge signifies an era of data-driven decision-making. It’s about leveraging data as a strategic asset to gain insights, predict trends, and drive innovation.
Sustained Demand for CRM Software
The global CRM software market is poised for growth, with a forecast size of $57 billion in 2025. This figure demonstrates an increase of nearly $4 billion from 2021, driven by a CAGR of 2.1%.
It’s noteworthy that, in a 2018 survey, only 16% of US organizations deemed their delivery of real-time customer interactions across touchpoints and devices effective. Now, the environment has changed. The driving force behind this increased investment is now the desire to scale customer-centered decisions and actions across various business functions.
The ERP Software Market
Moving on to ERP, this market has a projected valuation of $106 billion in 2023, and by 2025, it is expected to elevate further to $108.8 billion. As your organization navigates these years, ERP software will become a strategic asset, ensuring your readiness for the future of enterprise technology.
Notably, SAP and Oracle are emerging as two of the market’s leading vendors, spearheading innovation and driving the adoption of ERP solutions across industries.
PLM & Engineering Software
Product lifecycle management and engineering software are catalysts for innovation and efficiency in product development. In 2020, the global market reached a substantial valuation of $20.95 billion. Projections for 2023 and 2025 indicate further momentum, with an estimated value of $21,9 million and $22,6 million, respectively. So, leveraging these can be a strategic advantage now and in the coming years.
AI and Language Technology
As for AI trends, they are set to rethink customer service, elevate e-commerce experiences, and provide personalized language learning opportunities.
AI-Powered Customer Service
AI-powered customer service addresses challenges in online retail, such as misrepresented products, difficulties in getting assistance, and slow response times from online agents, especially during peak periods.
Customers still prefer online shopping for its convenience, even with these challenges. To address them, businesses are increasingly turning to AI chatbots for customer service (IKEA’s BILLIE chatbot, Zowie’s smart assistance, LAQO’s first-of-a-kind digital assistant for fintech, etc.).
Intetics CEO and President, Boris Kontsevoi, took a detailed look at the possibilities of Conversational AI in Customer Services in a research paper “Artificial Intelligence: How to Boost and Turn Conversational AI Into Business Success.” Get access to full paper here.
Enhanced E-Commerce Experiences
AI-driven algorithms are redefining how businesses interact with customers online by analyzing past behavior and preferences, enabling them to offer products and services that resonate on an individual level.
Furthermore, AI is optimizing every facet of e-commerce operations behind the scenes. From supply chain management to inventory control and logistics, algorithms are streamlining processes with surgical precision. This translates into lower operational costs and faster order fulfillment.
Personalized Language Learning
New startups are entering the scene with generative AI-powered platforms for language education. These platforms are ushering in a new era of language learning with advanced feedback, streamlined lessons, and cost-effectiveness for users. The technology goes beyond traditional methods to adapt to individual learning styles and paces.
Yet, the effectiveness of real-time, teacher-led lessons cannot be underestimated. By leveraging generative AI, businesses are finding a middle ground. For business leaders, this presents an opportunity to enhance educational offerings and cater to the ever-growing demand for language skills.
Cloud and Data Management
The importance of cloud business intelligence is undergoing a shift, with a prime example being the growing criticality of sales and marketing and research and development activities. Simultaneously, the usage of encryption is on the rise universally, but some industries are leading the way.
Cloud Integration and Encryption Momentum
Cloud integration has become paramount, as indicated by the growing importance of cloud BI among various departments within organizations. In 2021, sales and marketing respondents marked it as critical, highlighting the increasing integration of cloud services with enterprise resources. R&D departments have also identified its importance, with 42.5% marking it as critical.
Additionally, prioritizing encryption falls into a bigger trend. While different departments may have varying degrees of concern regarding externally hosted services and tools, the overall trend shows an acknowledgment of the significance of data security.
In 2022, the technology and software industry led the way in adopting encryption solutions, with 72% of organizations in this field implementing strong data security measures. Similarly, the manufacturing and energy/utilities sectors also made meaningful progress. On the other hand, the transportation industry was somewhat slower in adopting encryption solutions.
Merger and Acquisition Dynamics
Another noteworthy transformation is the shifting profile of M&A buyers within the software industry. In 2010, technology companies were the dominant buyers of software firms. However, by 2020, the landscape had diversified profoundly. The buyer pool now comprises not only technology companies but also private equity and venture capital firms and nontechnology companies.
The shift in buyer types indicates that software companies are attractive to many, and forming strategic partnerships and buying other companies is a crucial part of the industry’s growth and expansion.
Office Suite and Open Source
Office software faces fierce competition primarily because two major companies dominate this space. Expect to see a growing number of businesses embracing open-source software in various aspects of their IT infrastructure.
Office Suite Competition
For decision-makers, understanding the competition in the office suite arena is crucial — it influences choices related to software adoption, productivity enhancement, and collaboration tools. In 2023, Google’s office suite has secured over 50% of the global market share for major office suite technologies. In contrast, Microsoft’s Office 365, a long-standing competitor, has recently lost its leading position to Google Apps.
Open Source Adoption
Open source adoption extends beyond infrastructure modernization and is instrumental in application development, facilitating DevOps practices, and expediting digital transformation initiatives. Across different regions, adoption has been on the rise, reflecting its global significance:
- In APAC (Asia-Pacific), it grew from 69% to 75%.
- LATAM (Latin America) witnessed growth from 65% to 77%.
- EMEA (Europe, Middle East, and Africa) saw adoption surging from 56% to a remarkable 79%.
It appears that regions that were previously lagging in the adoption of open-source technology have now successfully caught up with the prevailing trends.
Technology won’t wait. The above IT trends act as early indicators, alerting you to new opportunities and potential pitfalls before they become mainstream. Embrace a forward-looking approach to be well aware of emerging IT solutions and be proactive in their implementation. Contact us in case you need an expert guidance in the field of innovative software.
