IDC Korea forecasts 8.9% growth in the domestic enterprise application market this year.

According to a recent report ('Korea Enterprise Application Market Outlook, 2015-2019') published by IT market analysis and consulting firm IDC Korea (CEO: Yoo-Sook Hong, http://www.kr.idc.asia), the domestic enterprise application market (including ERM, CRM, and SCM) grew by 6.2% last year compared to 2013, reaching a size of 385 billion won (based on software licenses).

With the market expected to reach 419.3 billion won this year with a growth rate of 8.9%, it is projected to grow at an average annual rate of 8.3% over the next five years, reaching 574.4 billion won in 2019.

According to the report, as the importance of cloud, big data analytics, and mobile environments expands in the domestic enterprise application market, software vendors are strategically preparing for these technologies; analysis indicates that cloud computing is the most actively applied technology in the software sector. As cloud computing serves as a foundational technology supporting areas such as mobility, big data analytics, and social media, it is expected to grow further alongside the development of other technologies.

In practice, companies are still adopting on-premise enterprise applications that can be seamlessly implemented into existing systems, but the on-premise approach causes ongoing cost issues regarding upgrades. IDC anticipates that an increasing number of companies will actively consider adopting cloud solutions to address cost issues and bridge software capability gaps.

Choi Moon-soo, an analyst at IDC Korea responsible for enterprise application market analysis, stated, “The major issue for enterprise applications, not only in Korea but globally, is undoubtedly the cloud.” He added that global vendors in the enterprise application sector are actually providing both their own solutions and SaaS-based cloud solutions simultaneously, and that this trend will also impact domestic vendors.

Researcher Choi further emphasized, “Due to sensitive issues such as security and compliance, steadily expanding the implementation of hybrid clouds that combine private and public clouds will be one of the key success strategies for the enterprise application market.”