Cloud Enterprise Resource Planning (ERP) Market size is estimated to reach $41.09 billion by 2025, after growing at a CAGR of 9% during the forecast period (2020-2025). Cloud ERP is a type of software as a service (SAAS)that provides increased accessibility through the internet, which enables the users to share and transfer data in real-time specifically across business departments. Factors such as the growing needfor optimization of business process, effective resource utilization in the enterprises are attributing for the market demand ofcloud ERP.This is because the integration of ERP and MES systems enables accessibility to gather data fromthe entire supply chain.On the other hand, overall equipment effectiveness (OEE) determines the effective usage of assets in a manufacturing execution systems and defines the manufacturing operations performance. In schools and colleges, the prevalence of ERP database management system is in a rise to handle and manage the academic and administrative system.All these factors are boosting the growth of the cloud ERP market.
• North America dominates the Cloud ERP market
share owing to the increasing number of cloud ERP vendors in this region.
• The growing prominence of cloud ERP in managing BFSI business operations is playing a vital role in burgeoning the market growth of Cloud ERP.
• Increasingadoption of cost-effective technology by SMEs to stand ahead of the curve in the customer-centric economy. Therefore, this factor is driving the market demand for Cloud ERP.
Vertical- Segment Analysis
BFSI segment occupiedthe major share in the cloud ERP market size,as of 2018. This is due to the rise in the adoption of ERP solutions by the enterprises in BFSI vertical to develop their day to day operations while maintaining operational efficiency. Moreover, these cloud-based solutions offers notable benefits to enterprises in BFSI vertical, which include business continuity, flexibility, and cost savings. The growing focus of enterprises to deliver their online services online to digitally connected customers coupled with the entry of FinTech companies resulted in the disruption in BFSI. On the other hand, insurance companies are concentrating on digital service offerings to customers which hold on these disruptions and traditional banking. The cloud-based content management system supports varied businesses to store and edit using a unified platform.
Organization Size- Segment Analysis
Small & Medium Enterprises (SME’s) has been elevating as the primary market for cloud ERP. SMEs operate using limited budget and manpower, which represents the prone to risk.
Thus, price-sensitive SME’s are adopting advantageous cloud ERP cost-effective solutions tomodernize the business process, thereby stay competitive in the marketplace. This is because, ERP supports enterprises to manage different aspects involved in a business, such as inventory management, customer relationship management (CRM) and purchasing. In addition to this, ERP applications deal with modules for the finance and human capital management aspects of a business. Hence, cloud ERP is one of the promising technology trends that support organizations that are operating in the customer-centric economy.
Geography- Segment Analysis
North America dominated the global Cloud ERP market share, accounts for more than 32%,followed by Europe and APAC. It is owing to the highest rate of adoption of cloud, analytics, IoT, big data, mobility,and digital transformation technologies in the U.S., Canada, and Mexico. The presence of more number of cloud ERP vendors, continuous technology advancements by enterprises is contributing to the growth of the North America cloud ERP market. This adoption is not only highlighting single region share but also providinga significantnumber of opportunities to the cloud ERP vendors across the globe to engage with effective business operations.
Drivers –Cloud ERP Industry Outlook
• Adoption of Cloud ERP -Economical Solution by SMB’s(small and medium-size businesses)
Cloud ERP sidestepsup-front costs associated with computing infrastructure such as data servers and hardware. And also, it eliminates upfront payment for application software licenses instead it follows a fixed monthly rate for the computing resources.It reduces IT support services, as the data center providesIT support. Moreover, it assists the cloud vendors in handling updates with low maintenance costs.
• Flexibility Offered by the Cloud ERP
Cloud ERP is more flexible, can be switched among Apple iPads, Google Android, and Linux desktop computer.This ERP provides access to data all-time which supports the copy or transfer of the data at any time. Hence, many small and medium-sized enterprises are adopting cloud ERP with a safe & secure hosting provider to improve control and enhance productivity with reduced costs. Additionally, it fulfills the need for computing power and data storage size during the business changes and also offers deployment options ranging from SaaS, hosted in a private cloud, which can be switched according to needs.Data storage in the cloud avoidsattacks on the company’s server. Thus, Provides accessibilityof the system from anywhere and supportsthe geographical expansion of a company.
Challenges – Cloud ERPIndustry
• Management Challenges – Cloud ERP
The admins will face a control issue when the enterprise moves offsite as it depends on the provider’s security. Furthermore, fewer customization abilities compared to on-premises infrastructure and arise of integration complexities while implementing new management processes for a cloud ERP system hampering the growth of the cloud ERP market. Growth in the enterprise demands cloud change, which leads to the purchase of additional modules from vendors in order to experience uninterrupted cloud services. Thus, these bugs has to clear to fuel the cloud ERP demand in the future.
Product portfolio expansionis the key strategyadopted by the major players in the cloud ERP market. In 2018, the market of cloud ERPhas been consolidated by the top five players accounting for 42% of the share. Epicor Software Corporation, Financialforce, Infor, Microsoft Corporation, Oracle Corporation, Plex Systems, Inc., Ramco Systems, Sage Software, Inc., SAP SE, and Unit4are Cloud ERP top 10 companies.
Product Portfolio Expansions
- In April 2019, Oracle added Netsuite ERP to its NetSuite portfolio, the best cloud ERP solution in the world. This provides a modern, scalable, and unified business management software platform for thousands of customers across hundreds of countries. Additionally, it offers planning and budgeting service which is flourishing the prominence of business management solution NetSuite.
- In September 2019, Oracle has updated SaaS tools especially, cloud ERP portfoliowith added AI capabilities and industry-specific features. The new features of Oracle ERP Cloud application include expansion of Oracle digital assistant, intelligent document recognition, IoT monetization, expense reporting assistant, student financial planning for higher education, and joint venture accounting for Oil & Gas.
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