ARC: Demand for Commodities, Energy Drives EAM Sales
September 7, 2008 // Published as a news service by IHS
The worldwide market for enterprise asset management/computerized maintenance management systems (EAM/CMMS) is expected to grow at a compounded annual growth rate (CAGR) of 6.5% over the next five years.
The market was $1,343.5 million in 2007 and is forecast to exceed $1,800 million in 2012, according to ARC Advisory Group.
According to ARC, a strong manufacturing sector with demand for commodities and energy has permitted many companies to increase budgets for maintenance and capital expenditures.
However, some remain cautious as economic uncertainty, driven by an impending U.S. recession, threatens growth prospects.
While the state of the global economy still appears uncertain for many reasons, spending for asset management software and services has remained healthy in most regions, ARC said.
The developing regions of the world are investing in new infrastructure and other products manufactured by asset-intensive industries to support their growth.
This growth has contributed to a commodities boom that has propelled growth in natural resource exporting countries such as Brazil, according to ARC.
"The emerging markets of Latin America, Asia Pacific and Eastern Europe continue to offer the best opportunities for new sales of EAM software and services due to the growth in capital spending related to infrastructure projects and commodities demand," said to Clint Reiser, ARC analyst, enterprise applications.
Much of the growth in EAM sales is going to be driven by services, with prominent growth from maintenance and support services and moderate growth in implementation services, ARC said. This pattern is typical for mature markets such as EAM.
Mining and metals, oil and gas and electric power are the industrial manufacturing industries from which strong EAM software sales growth is anticipated. ARC said these industries are experiencing growth due to emerging market demand and an increase in capital spending.
Limited growth is expected from Tier 1 as most of these companies in developed regions have implemented an EAM tool and are either reaping the benefits or struggling to improve solution performance, ARC said.
Tier 2 is expected to experience moderate growth as these companies are adopting best practices from proven implementation to remain competitive. ARC anticipates Tier 3 to experience the strongest growth as EAM adoption expands in this market segment of limited size.
Innovation in functionality offered by vendors and integration with complementary systems are factors ARC expects to contribute to future sales in the EAM market.
Some of the areas of integration and functionality that are expected to drive sales include integration with real-time condition monitoring systems, global information systems (GIS), mobile wireless and maintenance strategy tools.
Integration with these systems provides users of EAM systems with a more comprehensive and robust platform of asset information and infrastructure for information delivery, ARC said.
For more information on this ARC study, titled Enterprise Asset Management (EAM/CMMS) Worldwide Outlook, go to http://www.arcweb.com.
Source: ARC Advisory Group.