Wed, Oct 30, 2013 - Page 14 News List

Enterprise software market value falls

DEMAND SUFFERS DOWNTURN:Companies in the manufacturing sector reduced their consumption of software for supply chain and customer management the most

By Helen Ku  /  Staff reporter

Taiwan’s enterprise software market value shrank 2.4 percent to US$85.14 million during the first half of the year from US$83.14 million a year ago, as most firms remain cautious about information and technology system upgrades amid slow economic recovery, according to International Data Corp (IDC).

“Because the global economy remains sluggish, most publicly owned companies in Taiwan reduced their spending on software upgrade or replacement during the first six months of the year,” IDC analyst Shirley Tsai (蔡宜秀) said in a report released yesterday.

Last year, a majority of listed companies in Taiwan finished upgrading their enterprise software in order to comply with the International Financial Reporting Standards (IFRS) from this year, Tsai said.

To offset the reduction in sales, both local and foreign enterprise software sellers had started exploring new sales sources in retail, tourism and cosmetic sectors, Tsai said.

Some software sellers had begun cooperating with firms in the medical sector to research and develop new product solutions, while some targeted firms in the logistics sector to provide software used for reverse logistics management, she added.

“It is possible that demand for enterprise software will increase with more privately owned companies set to upgrade or replace their IT systems to follow the IFRS over the following months,” the report said.

During the January-to-June period, sales of software used to help maintain businesses’ operation and manufacturing activities increased 1.2 percent to about US$30 million from a year ago, IDC said.

The growth was mainly supported by semiconductor makers’ continual IT system upgrades while expanding their capacities, the US-based market researcher said.

However, as most companies held back decisions on renewing their current software while they remain usable, sales of software used for supply chain and customer relationship management declined 7 percent and 4.7 percent to about US$9 million and US$12 million respectively.

Firms in the manufacturing sector reduced their consumption of software for supply chain and customer managements the most, IDC said.

Sales of software used for enterprise resource management dropped 3.2 percent to about US$35 million during the first half of the year, according to the report.

Looking ahead, IDC forecast software used for operation and manufacturing management would continue growing on the back of strong demand from the semiconductor and food industries.

The markets for software used for supply chain and customer relationship managements will not recover until global macroeconomic conditions improve, IDC said.

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