After almost doubling in 2003, the Romanian market for enterprise application software (EAS) expanded by only 25.9% in license and maintenance revenue to $35.4 million in 2004.
According to a new IDC study, this dramatic deceleration stemmed from a drop in the unusually high number of large projects from last year. Despite the slowdown, the Romanian economy is strong, there is still considerable room for growth, and IDC expects EAS revenue in Romania to rise by 24% this year and by 20% in 2006.
SAP, SIVECO, and Oracle dominated the Romanian EAS market in 2004. While SAP took first in terms of L&M revenue by a relatively safe margin, second-ranked SIVECO struggled to stay less than a point ahead of Oracle. Together these three vendors accounted for just over 60% of the market last year. "SAP had a very strong year despite the market slowdown," says Laurentiu Popescu, IDC Romania Branch Manager. "SAP's dominance in countries further west played a part in this success, as companies are increasingly looking to integrate systems across borders."
Representing more than 57% of L&M revenue, enterprise resource management (ERM) was again the largest functional area in the Romanian EAS market last year. In fact, the financial application sub-segment accounted for a greater share of revenue than the second-largest functional area, supply chain management (SCM) at 17.2%. Operations and manufacturing applications (OMA) was the third largest functional area. "In addition to their willingness to invest in financial management software," says Popescu, "companies are using EAS and EAS upgrades to help bring operations and accounting in line with changes in fiscal policies and the labor code."
Fueled by the completion of privatization deals and the takeover of Petrom by OMV, utilities invested more in EAS in Romania in 2004 than any other single vertical sector. The thriving retail sector came second as new hypermarkets opened and already successful stores implemented inventory and supply-chain controls to better manage growing turnover. Telecommunications and broadcasting was third and discrete manufacturing a very close fourth. Together these four verticals accounted for nearly 66% of L&M revenue in the country last year. "By Central European standards the Romanian EAS market is still relatively small," says Popescu. "These sectors are all thriving due to the mix of the strong economy and rises in real wages. Although the market is starting to show signs of maturity and vendors are starting to specialize, there is still a long way to go before things level off."
IDC's Romania Enterprise Application Software 2005'“2009 Forecast and 2004 Vendor Shares (IDC# ER09M) provides a detailed overview of the Romanian market for high-end integrated EAS packaged software products. The study includes detailed qualitative and quantitative information, analysis, and forecasts. It delineates the defining characteristics of the Romania EAS market, shows which segments are investing in EAS solutions, and notes how future spending will affect market development. The study covers the primary EAS operating environments, how sales affect third-party hardware and software vendors, and how vendors across the IT spectrum (hardware platform vendors, database vendors, operating system vendors, and enterprise application vendors) can capitalize on the continued expansion. In addition to noting how political and economic conditions specific to Romania impact the market, the study also tracks and analyzes leading players.
For more information, please contact Tatiana Hinova at +420 221 423 140 or by email at thinova@idc.com.
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