Southeast Asia shows strong ERP growth

Southeast Asia shows strong ERP growth

The market for ERP (enterprise resource planning) software in Southeast Asia grew 65 per cent in 1997 over the 1996 figure and will maintain annual sales growth of almost 30 percent over the next five years, International Data Corp said at an industry briefing here.

"ERP software is one of the hottest markets here right now," said Lawrence Llamzon, research manager, systems and storage at IDC Asia-Pacific. "Market drivers include the rapid industrialisation in selected countries and the move by ERP vendors into the mid-sized business market."

In 1997, sales of ERP software reached $US115 million in Southeast Asia, compared to $US78 million in China and $32 million in India. Singapore and Malaysia accounted for 68 per cent of the Southeast Asia market because of the strong presence of mid-sized businesses, often supported by government subsidies to help with computerization costs, Llamzon said.

The rise of Windows NT as a cost-effective platform for running ERP software is also driving the market, although Unix remained the market leader, Llamzon said.

"The regional economic crisis has cut both ways on NT adoption," Llamzon said. "New technology adopters see that an Intel/NT solution is cheaper than a RISC/Unix one, but users are also trying to stretch the life of their old technology."

According to IDC figures, Unix platforms are host to 45 percent of ERP systems, with Windows NT at 29 per cent, and IBM's midrange OS/400 at 24 percent.

The rapid market growth is attracting more ERP vendors into the region to challenge the clear lead enjoyed by SAP AG. Chasing SAP's 42 per cent market share are Baan Co, PeopleSoft, System Software Associates (SSA), and J.D. Edwards & Co, according to IDC figures.

"Vendors are going to have to work harder to convince IT departments that an investment in ERP will bring a return," said Llamzon. "They need to have a direct presence here, but also to address cultural differences through local partners in the various countries. Having the right hardware and services partners can make the difference between market leadership and playing catch-up."

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