III. Industry Analysis
3.1 Market Size
The global ERP market size was valued at $39 billion in 2019 and is projected to reach $86 billion by 2027, growing at a CAGR of 9.8% from 2020 to 2027. The software segment is expected to maintain its dominance in the upcoming years, owing to an increase in the adoption of services such as consulting, training, and others, as these services reduce the time and costs associated with optimizing systems in the initial phase of deployment. Global suppliers are developing user-friendly interfaces and functionalities, moving away from the existing high degree of complexity in software. The upward trend portrays an increase in cloud deployment of ERP over an on-premise solution, owing to cost savings and ease of access to applications through the cloud and mobile devices.
In 2019, North America acquired over 33.4% share of the overall ERP software market, with a market valuation of $12.754.2 million. The North American ERP software market valuation is projected to grow further at a 7.6% CAGR.
3.2 Industry Profile
The advent of cloud computing and software-as-a-service (SaaS) deployments are at the forefront of a change in the way businesses think about ERP. Moving ERP to the cloud allows businesses to simplify their technology requirements and see a faster return on their investment. SaaS-based ERP solutions are gaining popularity in the mid-market segment, where it proves to be cost-effective in terms of implementation, reduced operational cost, increased business agility, and ease of start-up and maintenance.
Revenues generated from selling traditional ERP systems have been declining since 2013 to a level that has already been surpassed by the total revenue from cloud-based SaaS solutions. It is predicted that traditional ERP vendors' SaaS revenue will soon surpass their revenue from legacy ERP sales.
The global Software as a Service (SaaS) market size is projected to reach $307.3 billion by 2026, from $158.2 billion in 2020, at a CAGR of 11.7% during 2020-2026. The revenue of the US SaaS market is expected to experience the largest increase, from $103.90 billion to $215 billion in 2025.
