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SAN JOSE, Calif., May 6, 2002 - While some segments of the
enterprise application software (EAS) markets have shown little or negative
growth, the service process optimization (SPO) software market has been one
of the bright spots for the software industry, according to Dataquest Inc.,
a unit of Gartner, Inc. (NYSE: IT and ITB).
Gartner Dataquest analysts said the worldwide SPO market grew more than 50
percent in 2001, to $272 million, and is forecast to grow another 50 percent
in 2002 to $414 million.
Demand for SPO software will continue as service organizations seek tighter
financial controls and improved resource allocation. Although traditionally
targeted at professional services organizations, SPO has been expanding its
reach to internal IT and other service branches within organizations.
"In this competitive economy, characterized by renewed attention to
efficiency and cost reduction, SPO offers the potential to streamline an
organization's service management and delivery process," said Ted Kempf,
principal analyst for Gartner Dataquest's IT Services program. "As the
adoption of SPO software increases, companies that offer point solutions,
such as stand alone project management and time and expense capture tools,
may find themselves at a strong disadvantage if they do not develop an
integrated SPO solution."
Gartner Dataquest defines SPO software as integrated software designed to
optimize the allocation and tracking of resources (people, intellectual
capital and time) and administer outward functions and inward processes of
service-intensive industries, organizations and departments.
Because much of SPO functionality already exists, many EAS vendors are
increasingly adding SPO to their product offerings and have begun to sell to
their customer base. As SPO moves from competitive advantage to competitive
necessity, EAS vendors not already active in the space must consider entry
through product development, acquisition or, for the short term,
partnerships with established SPO vendors.
"No clear market share leader has emerged, and as EAS vendors continue to
penetrate the SPO space, they will validate the industry and increase
competition," said Hams El-Gabri, analyst for Gartner Dataquest's Software
Industry Research group. "Hosted models have recently gained popularity and
are expected to continue to do so until clear signs of economic recovery are
present. Traditional vendors should look for opportunity in alternative
revenue models to supplement buyer choices."
SPO applications will continue to improve, offering better integration with
front-and back-office customer relationship management (CRM), human
resources and financial enterprise resource planning (ERP) modules. Gartner
Dataquest analysts believe that SPO vendors that want to become market
leaders in this space must enhance opportunity and resource management
functionality, time and expense capture/project accounting, as well as
improve reporting and forecasting abilities. Analytics will play a role in a
rising trend toward real-time corporate decision making and are expected to
become a critical driver for the growth and development of the SPO software
market.
Additional information on the SPO software market is available in the
Gartner Dataquest Market Trends report "Service Process Optimization
Software, 2001." This report offers a look at the leaders in the
marketplace, as well as a forecast for the industry through 2006. More
detailed statistics are available in the report " Service Process
Optimization: 2001 Preliminary Forecast and Vendor Market Shares."
This information is produced by Gartner Dataquest's Worldwide Software
Industry group. This research group provides analysis on infrastructure and
application product market trends, player positioning and channels of the
packaged business application software market. To subscribe to Gartner
Dataquest's Software Applications or Infrastructure Worldwide programs,
please call 408-468-8000. Reports can be purchased on the Internet at
www.gartner.com.
More information on the future of the SPO market will be presented at
Gartner's IT Services and Sourcing Summit 2002 which will be held
May 15-17, 2002 at the Rio All Suite Hotel and Casino in
Las
Vegas. This event brings together buyers and sellers of IT services, and is
focused on helping each with tactical market research and advice delivered
by the largest and most experienced team of IT services and sourcing experts
anywhere. For more information on this conference, please go to
www.gartner.com/us/itsourcing.
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