Dedham, MA — The worldwide market for Enterprise Asset Management (EAM), not including IT Enterprise Asset Management (ITEAM), is currently at $1.5 billion and is estimated to grow at a compounded annual growth rate (CAGR) of 7.6%, reaching over $2.1 billion in 2011, according to a new ARC Advisory Group study.
Extended solutions and other important asset management strategies offer good value propositions for customers looking to increase productivity, reduce costs, or just avoid unnecessary penalties, said ARC research director Houghton LeRoy, the principal author of ARCs Enterprise Asset Management (EAM/CMMS) Solutions Worldwide Outlook. But market consolidation will continue to adversely affect growth until the strategic direction of many new acquisitions is clear.
Market maturity and the overabundance of solutions in North America and Europe will continue to drive software prices down for traditional EAM/CMMS solutions. Fortunately, this will be offset by revenue increases in maintenance support services and new EAM/CMMS product offerings, which ARC collectively refers to as Extended Solutions.
These extensions are being driven by new technologies, like the Internet, mobile wireless devices, RFID, and new condition monitoring devices, as well as new regulations and decision support requirements. They represent a major portion of product development for leading solution providers and will provide significant benefits for EAM end users in coming years.
It is estimated that the market for extended solutions that generate new customer opportunities will grow close to 10% annually over the next few years and this will be a key driver of activity and new opportunities in an otherwise mature market segment.
NEW DEVELOPMENTS AND IMPORTANT MARKET TRENDS
The biggest news in 2006 for the EAM and CMMS markets is the extensive consolidation among the many leading suppliers. Eight of the 12 leading EAM suppliers from 2005 have undergone extensive organizational changes through mergers and acquisitions in 2006, with five of them receiving new corporate identities. Most of the market share changes in 2006 can be attributed to the many mergers and acquisitions among these leading suppliers.
The market uncertainty has forced customers to look for better maintenance and support to protect existing investments until the status of future releases is determined. The extensive market consolidation changes should drive customer decisions to either upgrade or seek new alternatives to satisfy their EAM/CMMS requirements.
In addition to the market consolidation, asset management has never been more challenging for organizations. Aging assets, tougher regulatory compliance and increasing security requirements are driving up costs, while budgets are continuously being cut. Professional asset managers have implemented most of the conventional practices and need new ways to drive improved asset performance and lower costs.
EAM solution providers are addressing this challenge in many ways. They are offering product enhancements that exploit better information management and decision support to finally enable true lifecycle management strategies. They are also incorporating enhanced performance measurement and analysis tools to drive continuous improvement, supporting new technologies that can enable improved productivity and embedding growing compliance requirements directly within work processes. Anyone not following these developments is likely missing some significant opportunities.
For more information, visit www.arcweb.com.