$2.2 Billion in Software Spending for U.S. “Small Businesses”

AMI Partners reports that Small and medium businesses in the United States are on track to spend $2.2 billion on enterprise software this year, up 10% from last year. Fueling this growth will be the continued demand for ERP (enterprise resource planning) and CRM (customer relationship management) solutions, especially from medium businesses, according to the latest report from AMI-Partners.
“More MBs in the U.S. now seek to streamline and automate business processes and thereby maximize the value from their current assets,” says Sau Lam, New York-based Research Analyst at AMI-Partners. “The healthy growth for enterprise software spending comes mainly from MBs with 100-999 employees. Many of these MBs also want to ensure they meet new regulatory requirements and see automation as the best way to do that.”
Medium Businesses, the Sweet Spot for ERP and CRM Vendors
ERP is becoming a mainstream application for MBs. Currently, 31% of MBs use ERP solutions. Demand is also more prevalent among MBs, with close to a quarter of MBs indicating their interest in adopting ERP solutions in the next 12 months. Top ERP brands include Microsoft Great Plains, Best Software and Oracle. CRM adoption is also higher among MBs than among SBs. Over half of MBs currently use and/or plan to use CRM solutions in the next 12 months, compared with 23% of SBs. Although ACT! and other packaged software offerings are most prevalent, survey data shows salesforce.com gaining traction in both small and medium businesses. Adoption of hosted, software-as-services (SaS) solutions is low, but growing. A majority of SMBs have yet to embrace the software as services model, but pervasive high speed
Internet access, growing awareness and wider availability of products will fuel future growth across many application areas. Currently, less than a fifth of SBs and 27% of MBs use or plan to adopt SaS and hosted applications.
AMI-Partners’ latest report, 2005-2006 U.S. SMB Applications & Solutions Market Overview and Assessment, provides an overview of business applications and solution use among small and medium businesses in the U.S. The focus is on adoption and spending on ERP, CRM, accounting software, outsourcing, hosted and software as services solutions by employee size and vertical industries.