Growing Kiwi accounting software firm, Xero, has overtaken SAP to become the largest vendor in the Financial Application software market in 2014, taking the top spot in this sub-market segment as it continues to challenge traditional vendors in the broader ERP market in terms of market share.
According to IDC’s Asia Pacific Semiannual Software Tracker (2H 214), the New Zealand software market grew by 6.5 percent YoY in 2014, close to IDC’s predicted 6.6 percent forecast from mid 2014.
Continuing this trend, the market is set to grow by a five year compound annual growth rate (CAGR) of 6.5 percent to reach NZ$1,791 million in 2019.
According to IDC findings, the ERP market was the major growth engine for the New Zealand software market in 2014.
Mainly driven by Cloud solutions, the Financial Application and Human Capital Management market (HCM) grew by 29.8 percent and 25.9 percent respectively in 2H14.
Although only offering Financial Application software in New Zealand, Xero overtook the market leader SAP in terms of market share.
“The local ERP market has been widely disrupted by Xero, which is driving most of the growth in the local ERP market,” says Melanie Disse, Market Analyst for A/NZ Software & Analytics, IDC.
“Although Xero only offered Financial Applications in New Zealand, so far, it managed to sneak up to the top of the New Zealand ERP market.
“It will be interesting to watch what is going to happened in 2015 when Xero starts offering Payroll Applications and Inventory functionalities in New Zealand.”
Disse says the Financial Applications market also shows the highest five-year-CAGR within the ERP market in New Zealand.
With a five-year CAGR of 10.0 percent, the Financial Applications market will remain the largest sub-market within the ERP market, larger than the rest of the ERP sub-markets combined.
Growth also occurred in the Application Development & Deployment (AD&D) Software market, which grew by 3.1 per cent YoY in 2014 driven mainly by Big Data & Analytics technologies.
According to Disse, this in turn fuelled the Data Access, Analysis and Delivery (DAAD) and Structured Data Management Software (SDMS) markets with 5.4 percent and 5.2 percent YoY growth respectively.
Within the Infrastructure Software market, growth was mainly driven by the Storage and System Management Software markets, 11.4 percent and 8.9 percent respectively in 2H14.
Please note - This story has been updated as of 12:55pm (Wednesday June 17, 2015).