Gartner Says Worldwide ERP New License Revenue Decreased 9 Percent in 2002.

Business Editors

STAMFORD, Conn.--(BUSINESS WIRE)--June 18, 2003

As enterprises become much more conservative in spending their IT dollars, worldwide enterprise resource planning (ERP) new license software revenue suffered a 9 percent decline in 2002, according to Gartner, Inc. (NYSE: IT and ITB).

In 2002, worldwide ERP new license software revenue totaled $5 billion, down from $5.5 billion in 2001.

While 2002 was not a successful year for software providers, Gartner analysts said ERP application providers were able to reign in what could have been a potentially disastrous year.

"A shift in buyer behavior, due in part to users' past experiences of software failing to meet expectations, has created a more cautious buyer that seeks smaller, less-expensive pieces of software to quickly drive positive bottom-line results," said Chad Eschinger, principal analyst for Gartner's worldwide software applications research group. "Yet the market performed better, given the current state of world economies, merger and acquisition activity, and the change in buyer behavior. The increased strength of the euro also aided in bolstering what could have been a more serious decline."

SAP extended its lead in the worldwide ERP software market, with its new license revenue accounting for 25.1 percent of the market (see Table 1). Oracle and PeopleSoft experienced a decline in market share in 2002, while SAGE and Microsoft Business Solutions experienced a slight increase in overall market share.

Table 1

Top 5 Worldwide ERP Software Application New License Revenue Market Share Estimates for 2002

Company                  2002 Market Share (%)   2001 Market Share (%)
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SAP AG                                   25.1                    24.7
Oracle                                    7.0                     7.9
PeopleSoft                                6.5                     7.6
SAGE                                      5.4                     4.6
Microsoft Business
 Solutions                                4.9                     4.6
Others                                   51.1                    50.3
Total Market Share                      100.0                   100.0
----------------------------------------------------------------------

Source: Gartner Dataquest (June 2003)

All segments of the ERP software market experienced a decline in revenue in 2002. The financial management software market continued to lead all subsegments of the ERP market, but its revenue declined 8 percent in 2002. Manufacturing and human capital management (HCM) experienced the largest decline with 12 percent and 10 percent declines, respectively, in revenue in 2002.

Additional information is available in the Gartner Alert "Despite Worldwide ERP Market Decline, SAP Retains Leadership in 2002." The Alert provides statistics on the top-tier vendors within the ERP software market, as well as statistics on ERP sub-segments. The document is available on Gartner's Web site at http://www3.gartner.com/DisplayDocument?id=397963&ref=g_search. More detailed statistics will be available in an upcoming Market Statistics report due out later this month.

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About Gartner

Gartner, Inc. is a research and advisory firm that helps more than 10,000 clients leverage technology to achieve business success. Gartner's businesses are Research, Consulting, Measurement, Events and Executive Programs. Founded in 1979, Gartner is headquartered in Stamford, Conn., and has more than 3,800 associates, including approximately 1,000 research analysts and consultants, in more than 75 locations worldwide. Revenue for calendar year 2002 totaled $888 million. For more information, visit www.gartner.com.