1905 - Market Share Analysis - ERP Software, Worldwide, 2018
1905 - Market Share Analysis - ERP Software, Worldwide, 2018
1905 - Market Share Analysis - ERP Software, Worldwide, 2018
Worldwide, 2018
Published: 9 May 2019 ID: G00390945
The ERP software market saw an annual growth of 10% to become a $35
billion market in 2018. The continued transition toward digital business, the
maturing of SaaS applications and purchases of new ERP versions drove
end-user spending in ERP.
Table 1. Ranking of Top 10 ERP Software Vendors by Revenue, Worldwide, 2018 (Millions of Dollars)
2017 Rank 2018 Rank Vendor 2017 Revenue 2018 Revenue 2017-2018 2018 Market
Growth Share
Table 2 shows the growth of administrative ERP versus operational ERP during 2018.
2017 Revenue 2018 Revenue 2017 Market 2018 Market Growth 2018
Share Share Year
In general, for non-cloud-native providers, live customers on new platforms (compared to previous
generation products) remain small. But the revenue impact is already hitting the top line because
customers are buying and subscribing to these new platforms and are in varying stages of rollout.
■ Indirect usage licensing for robotic process automation (RPA) use cases; previously we saw this
mostly in connection with data extraction and consumption by third-party application providers.
■ Limited advisory/vendor consultation sold as a premium customer support subscription rather
than as a professional service.
■ Expanded user license types that enable providers to sell licenses for more of their clients’ user
base than before.
■ Additional capabilities (such as additional storage, sandbox systems, API support) that increase
the annual contract value.
During 2018, SAP further refined its vision of the Intelligent Enterprise (a future based on event-
driven, real-time business applications) to encourage more adoption of SAP S/4HANA. SAP’s vision
is designed to encourage customers to reimagine the experience which they give to their
customers, improve their internal productivity, increase innovation capacity and creating and
sustaining an engaged workforce.
To this end, SAP is still early in its journey of S/4HANA adoption (see “SAP S/4HANA Research
Roundup”). At the close of 2018, we estimate around 10,500 in total customers had licensed it, and
approximately 2,600 were in production. From the existing SAP ERP installed base, SAP continued
to make progress. Gartner estimates about 17% of the base have acquired the licenses and about
4% are in production on the platform. Overall while the percentage of customers in production
remained low, the product license switch to SAP S/4HANA did contribute significant revenue in
2018. Other ERP product lines such as SAP Business One (for small and midsize businesses) also
performed well, with around 6,000 new customers joining and a year-end customer count of 65,000.
From a cloud portfolio perspective, SAP Business ByDesign also saw continued momentum, as did
SAP Concur. SAP SuccessFactors is another key pillar within SAP’s cloud product strategy, which
finished 2018 with close to 3,000 Employee Central customers (over 30% growth). However, there
Oracle
Oracle maintained its No. 2 position in 2018, driven by a 5% annual growth rate and maintaining
11% revenue share of the overall ERP market. It finished the year with 6,000+ Oracle ERP Cloud
customers, with approximately 60% of customers net new to Oracle. Gartner estimates that 27% of
Oracle ERP Cloud customers also bought HCM Cloud, which has been a successful driver for
growth. In core financials, ERP Cloud was bolstered by new subscription and revenue management
features and the introduction of an Accounting Hub as a gateway to financial reporting.
NetSuite, Oracle’s cloud-native ERP for small and midsize enterprises, ended the year with 16,000+
customers and an ERP revenue growth rate of 25%. Sales momentum and productivity in 2018 was
helped by its investment in SuiteSuccess. SuiteSuccess is an implementation and onboarding
approach aimed at helping customers be in production within 45 days and giving them an active
roadmap for future value delivery. NetSuite also introduced Oracle NetSuite Planning and Budgeting
to provide additional capabilities, as well as additional sales presence in Europe.
Workday
Workday ascended to the No. 3 position, driven by another strong year of sales with 33% growth in
software revenue for 2018. Workday as a cloud-native provider competes in the administrative ERP
areas of FMS and HCM. It finished the fiscal year with a customer count of 2,600+ HCM customers,
650+ financial management customers and a user count of 35 million. While Workday’s HCM
customer count is not the highest of the big three, its strategy of targeting large global customers
with its suite-based approach is working well. Key attributes that helped Workday win include the
continual evolution of its cloud-native architecture, a largely organic approach to development, and
its focus on customer satisfaction.
In 2018, Workday executed its largest acquisition to date by acquiring Adaptive Insights to improve
and accelerate its capabilities for integrated business planning. Adaptive Insights continued to be
sold as a stand-alone offering, adding another 200 customers following its acquisition. Other
significant actions in 2018 included early adopter availability of platform as a service (PaaS), and
Workday being delivered via Amazon Web Services (AWS) for customers needing data residency in
Canada and Germany. These and other enhancements allowed Workday to better compete against
larger competitors with already released platform extension capabilities and more extensive data
center operations.
Sage
Sage slipped to No. 4 in 2018 despite a 10% increase in ERP software revenue (6% in home
currency). Like many established ERP providers, Sage is transitioning its business to be more
cloud-revenue-heavy through a combination of acquiring native cloud products and cloud-enabling
selective products within its existing portfolio.
Infor
Infor maintained its No. 5 position in 2018, underpinned by a 5% year-over-year growth rate. During
2018, Infor increased efforts on branding itself as a cloud ERP company, which it led with sales
motions tied to its CloudSuite solutions that are capable of running on multitenant AWS. By the end
of 2018, 70% of its sales revenue was subscription-based.
During the past year, Infor expanded its presence in healthcare, manufacturing, retail and the public
sector markets while increasingly differentiating itself on delivering last-mile vertical and
microvertical solutions. In other activities, Infor continued to enhance its Infor OS cloud operating
platform, including the ION messaging bus, the XML-based business object document integration
layer, the Ming.le user interface, and additional support for Amazon Web Services’ JSON-based
APIs.
Primary revenue drivers include continued sales momentum from Workforce Ready (a cloud-native
HCM and talent suite for small and midsize businesses) and adoption of Workforce Dimensions.
Workforce Dimensions is a recently released cloud-native workforce management suite and the
eventual successor to Kronos’ Workforce Central product. Kronos also generated new revenue from
the migration of on-premises license and maintenance customers to cloud licensing and
deployment options. While newer cloud-native products get most of the publicity, Kronos also
generated a substantial amount of maintenance revenue from a loyal installed base of Workforce
Central and other solutions within its portfolio.
In 2018, Ultimate grew its international operations by acquiring PeopleDoc, a key player in cloud-
based HR service delivery with offices in England, France, Germany, and the United States, and
more than 1,000 customers with users in 180 countries. Similar to 2017, Ultimate received a number
of awards for its culture, diversity and services, which helped to underline Ultimate’s image as a
positive and customer-friendly organization to do business with.
Evidence
Gartner’s market statistics methodology combines primary and secondary sources to produce
Market Statistics documents. Gartner surveys all major participants within the industry in the Asia/
Pacific region, EMEA, Japan, North America and Latin America. This primary research is
supplemented with additional research to verify market size, shipment totals and pricing
information. Sources of data used by Gartner include, but are not limited to, the following:
Gartner’s market statistics data is the most accurate and meaningful available. Despite the care
taken in gathering, analyzing and categorizing the data, careful attention must be paid to definitions
and assumptions. Various companies, government agencies and trade associations may use slightly
different definitions of product categories and regional groupings, or they may include different
companies in their summaries. These differences should be kept in mind when making comparisons
between data and numbers provided by Gartner and those provided by other research
organizations.
Gartner publishes all market share research in U.S. dollars. Our methodology converts the income
statements of non-U.S. vendors into U.S. dollars using the exchange rates provided in “Market
Share: All Software Markets, Worldwide, 2018.” Consequently, the reported growth rates and
market share for non-U.S. vendors in this report reflect a combination of actual native-currency
performance and the movement of other currencies versus the U.S. dollar. Historical quarterly and
annual exchange rates are calculated from appropriate averages of monthly exchange rates
reported by the Federal Reserve Bank of New York and the Pacific Exchange Rate Service.
Non-U.S.-headquartered vendors generally base and judge their annual performance in their home
currency rather the U.S. dollar. But for the purposes of comparison Gartner uses the U.S. dollar.
Gartner collects market share data for individual vendors in the vendor’s local currency. Data
reported in currencies other than the U.S. dollar is converted to U.S. dollars for the purposes of
cross-country comparisons and aggregation using average exchange rates. The impact of the
exchange rate changes can include the following:
■ Vendor growth measured in U.S. dollars may differ from the vendor growth measured in the
currency in which the vendor reports.
■ Occasionally, exchanges rate changes may have an influence on the market share positions,
where one vendor gets a beneficial effect of the exchange rate changes and another suffers an
adverse effect.
■ Changes in exchanges rates for the current year compared with the prior year mean that, when
measured in U.S. dollars, growth rates for revenue accrued in a foreign currency differ from
growth rates that are shown in U.S. dollars.
As a result of ASC606/IFRS15 adoption, which varies from vendor to vendor, Gartner has opted not
to restate financial history at the individual vendor level regardless of the method the vendor has
chosen to adopt.
We believe our approach to each vendor is the most equitable way to handle the anomalies
resulting from this industrywide change in revenue recognition standards.
We have made adjustments such that overall market growth trends are still reflected accurately.
More details regarding this approach will be detailed in the upcoming Market Definitions and
Methodology Guides for each market.
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