Singapore and Hong Kong, May 27, 2009 – Despite the global economic crisis, the business intelligence (BI) tools market in Asia/Pacific excluding Japan (APEJ)[1] grew positively at 7.7% and was estimated to be worth US$445.30 million[2] in 2008. However, this still represents a significant fall from previous years’ double-digit growth recorded for the region in 2005 to 2007.
With many businesses knee-jerking into freezing or slashing IT budgets as the global economic crisis unfolded, the BI software market generally contracted in 2H 2008 over 1H 2008 in most APEJ countries. Cost cutting measures and lower IT budgets are expected to contribute to longer sales cycle and more pricing pressure in 1H 2009. IDC’s end-user studies conducted in 1Q 2009 also confirmed that cost is the main consideration when IT decision makers in APEJ buy software. Organizations are likely to be more motivated to try alternative, lower cost BI solutions and delivery models which tend to tamper down revenue based market forecasts. At the same time, BI demand is expected to expand from within organizations.
"More users are seeking better access information, which is still one of the fundamental reasons behind BI adoption. The recent turbulent times and uncertainties have intensified the need for timely, accurate and relevant information to make sound business decisions. Following the economic crisis, many decision makers and information workers felt the pain of insufficient, inaccurate or contradictory information as they tried hard to grow their business.
With many businesses knee-jerking into freezing or slashing IT budgets as the global economic crisis unfolded, the BI software market generally contracted in 2H 2008 over 1H 2008 in most APEJ countries. Cost cutting measures and lower IT budgets are expected to contribute to longer sales cycle and more pricing pressure in 1H 2009. IDC’s end-user studies conducted in 1Q 2009 also confirmed that cost is the main consideration when IT decision makers in APEJ buy software. Organizations are likely to be more motivated to try alternative, lower cost BI solutions and delivery models which tend to tamper down revenue based market forecasts. At the same time, BI demand is expected to expand from within organizations.
"More users are seeking better access information, which is still one of the fundamental reasons behind BI adoption. The recent turbulent times and uncertainties have intensified the need for timely, accurate and relevant information to make sound business decisions. Following the economic crisis, many decision makers and information workers felt the pain of insufficient, inaccurate or contradictory information as they tried hard to grow their business.
IDC expects this need to fuel interest in BI solutions and pave the way for future BI growth once business sentiments improve," said Sharon Tan, Research Manager of IDC’s Asia/Pacific Software Research. "Preliminary analysis of the recent IDC-sponsored end-user research conducted in March-April 2009 also shows encouraging signs. Despite tough times, a significant percentage of organizations surveyed are already planning to equip users, such as managers and customer-facing employees, with timely information over the next 18 months by having BI more pervasively available in their organization."
Figure 1 below provides a snapshot of the BI market outlook in the region. Australia continues to account for the lion's share of the BI market in terms of software revenue, followed by Korea and the PRC. Overall the short-term outlook of BI solutions has slowed-down for all countries due to the economic uncertainties. In addition the 5-year CAGRs for a number of APEJ countries have been unfavorably impacted by weaker currencies in 2008, particularly for Australia, Korea, and New Zealand. Nonetheless, countries such as the PRC, India, and Thailand are expected to remain as the BI growth generators due to regulatory/compliance related issues, increasing maturity in application deployments and heightened competitive pressures. In most APEJ countries, increased competitiveness, coupled with highly cost-conscious businesses, have raised interest in BI and other business analytics solutions that can help address customer retention and customer wallet expansion goals.
For more information about purchasing the research, please contact Selina Ang at +65-6829-7717 or sang@idc.com. For press enquiries, please contact Lay-Fang Tan at +65-6829-7731 or mailto:hfung@idc.com.
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