Application market to recover by June, says AMR Research

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AMR Research expects to see a “sustainable pick-up” in software demand in June or early July this year, following strong growth in evaluation activity during the first quarter.

The market research company said in an alert: “It’s clear to us that end users are starting to see some light at the end of the economic tunnel. As such they are beginning to explore ways that enterprise software can be leveraged to assist in the recovery. Barring a double dip recession, sales should follow closely.”

But users are still being fairly cautious and are unlikely to go around buying software just for the sake of it.

“Shelfware is still a concern, prompting users to buy only what is needed at a given time. That said, middle managers to appear ready and willing to take a seat at the bargaining table. The critical watch factor will be whether they can put together the business case to get projects approved by senior management,” AMR warns.

The application area that appears to be rebounding the most quickly is enterprise resource planning, and while AMR says things could still remain challenging for vendors here during the second quarter, they should start looking more rosy from the third quarter onwards.

The customer relationship management market looks somewhat more troubled, however, which “may be an indication that end users are more focused on operational efficiency than customer-facing projects at this point in time.

The market researcher does admit, however, that its research to date has focused mainly on the manufacturing and retail sectors rather than non-manufacturing strongholds such as finance and telecoms.

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