Firms increase spend on new software projects

European firms plan to increase spend on developing new software projects this year

European firms are planning to significantly increase their spending on new software projects this year, with application integration, business intelligence (BI) and enterprise resource planning (ERP) projects set to dominate investment, a new study from analyst firm Forrester Research has revealed.

According to Forrester’s The State of Enterprise Software Adoption in Europe report, firms will spend 14 percent more on new software projects in 2007 compared with last year.

Application integration was identified as the top software project for this year, with over a quarter of IT managers listing this as a critical priority. More than a fifth of firms cited security software upgrades as a top priority, while 12 percent said they planned to adopt service-oriented architectures.

BI emerged as the top choice for first-time software investments, followed by ERP and procurement software projects.

ERP was also identified as the most likely software area to get a major overhaul this year, with 17 percent of firms planning to upgrade their current systems. SAP was the most popular choice for ERP supplier by far, with 41 percent of respondents favouring its products. Only 16 percent planned to invest in Oracle, and 11 percent in Microsoft.

SAP was also the most popular vendor for customer service or customer relationship management (CRM) software investments. However, almost half of respondents said they had not decided which CRM vendor to go with, while nine percent planned to build their own in-house systems.

The report also revealed some interesting trends in software-as-a-service (SaaS) adoption. Despite the perception that on-demand options are most attractive to small companies, only four percent of small businesses and eight percent of small-to-medium businesses were currently using SaaS, compared with 12 percent of very large enterprises.