Executive Briefings

Enterprise Asset Management Market to Exceed $2 Billion

Though the Enterprise Asset Management (EAM) market will decline during the difficult global economy, recovery is forecasted with significant net growth. The worldwide market for EAM is expected to grow at a compounded annual growth rate (CAGR) of 3.2% over the next five years. The market was $1,856 million in 2008 and is forecasted to be over $2,178 million in 2013, according to a new ARC Advisory Group study.

EnterpriseMacro-economic conditions are a major driver for this market during the forecast period. Some regions will recover more quickly based on government response and economic trends. Asia (with the exception of Japan) should lead the recovery. The Middle East is next. North America (the largest regional market) is expected to recover in late 2010 or early 2011. Western Europe and Japan are forecasted to lag.

"Current business conditions are causing firms to reduce operating costs and capital expenditures. Maintenance is among those being told to lower their operating costs. But, they cannot allow higher failure rates despite the aging equipment. Enlightened managers are finding opportunities to acquire EAM solutions with quick payback," according to Ralph Rio, Research Director, the principal author of ARC's "Enterprise Asset Management Solutions Worldwide Outlook".

ERP Suppliers Continue to Penetrate EAM: The type of competitors in the EAM market continues to shift from independent Best-of-Breed (BOB) suppliers to traditional Enterprise Resource Planning (ERP) suppliers and Systems Integrators (as with IBM). This trend has been occurring since the first EAM market study written by ARC back in 1997 when five of the top eight suppliers were BOB. However, it has accelerated during the past three years. Comparing 2008 and 2005 for the top seven suppliers, the portion of BOB suppliers shrunk from three to just one. The only remaining BOB happens to be the smallest of the seven. Thus, the portion of BOB suppliers by market share is even more dramatic. All of this change has occurred through acquisition of the BOB suppliers by others who are expanding their footprint to increase top-line revenue.

Assets Management Functions: EAM has specific key areas of functionality needed by maintenance organizations. Asset Information Management (AIM) includes the processes and technology for organizing, creating, controlling, change management, and auditing of the information related to assets and equipment. Work (or Service) Order Management includes the creation, planning, scheduling, schedule optimization, execution, documentation, and tracking of their activities. MRO Materials Management includes the procurement and management of the needed materials. Labor Management is related to needs assessment, training, certification, and scheduling of labor resources (internal employees and contractor personnel) related to the management of covered assets. Service Contract Management includes the creation and management of contracts and service agreements. Reporting and Analytics includes the functionality for the analysis of an asset and asset management performance. Mobility includes the application functionality needed for a mobile work force. It is the bi-directional exchange, processing, and presentation of information for EAM functional categories previously described.
Advisory Group

Though the Enterprise Asset Management (EAM) market will decline during the difficult global economy, recovery is forecasted with significant net growth. The worldwide market for EAM is expected to grow at a compounded annual growth rate (CAGR) of 3.2% over the next five years. The market was $1,856 million in 2008 and is forecasted to be over $2,178 million in 2013, according to a new ARC Advisory Group study.

EnterpriseMacro-economic conditions are a major driver for this market during the forecast period. Some regions will recover more quickly based on government response and economic trends. Asia (with the exception of Japan) should lead the recovery. The Middle East is next. North America (the largest regional market) is expected to recover in late 2010 or early 2011. Western Europe and Japan are forecasted to lag.

"Current business conditions are causing firms to reduce operating costs and capital expenditures. Maintenance is among those being told to lower their operating costs. But, they cannot allow higher failure rates despite the aging equipment. Enlightened managers are finding opportunities to acquire EAM solutions with quick payback," according to Ralph Rio, Research Director, the principal author of ARC's "Enterprise Asset Management Solutions Worldwide Outlook".

ERP Suppliers Continue to Penetrate EAM: The type of competitors in the EAM market continues to shift from independent Best-of-Breed (BOB) suppliers to traditional Enterprise Resource Planning (ERP) suppliers and Systems Integrators (as with IBM). This trend has been occurring since the first EAM market study written by ARC back in 1997 when five of the top eight suppliers were BOB. However, it has accelerated during the past three years. Comparing 2008 and 2005 for the top seven suppliers, the portion of BOB suppliers shrunk from three to just one. The only remaining BOB happens to be the smallest of the seven. Thus, the portion of BOB suppliers by market share is even more dramatic. All of this change has occurred through acquisition of the BOB suppliers by others who are expanding their footprint to increase top-line revenue.

Assets Management Functions: EAM has specific key areas of functionality needed by maintenance organizations. Asset Information Management (AIM) includes the processes and technology for organizing, creating, controlling, change management, and auditing of the information related to assets and equipment. Work (or Service) Order Management includes the creation, planning, scheduling, schedule optimization, execution, documentation, and tracking of their activities. MRO Materials Management includes the procurement and management of the needed materials. Labor Management is related to needs assessment, training, certification, and scheduling of labor resources (internal employees and contractor personnel) related to the management of covered assets. Service Contract Management includes the creation and management of contracts and service agreements. Reporting and Analytics includes the functionality for the analysis of an asset and asset management performance. Mobility includes the application functionality needed for a mobile work force. It is the bi-directional exchange, processing, and presentation of information for EAM functional categories previously described.
Advisory Group