Performance Management Spending Will Near $23B in 2006
A recent report by AMR Research found that performance management (PM) spending will increase to nearly $23B in 2006. Survey respondents indicate they will purchase more business intelligence (BI) and dashboards and less analytic applications. The dashboard and scorecard segment will grow to $5.22 billion in 2006—corresponding with a growth rate of 26%.
The dashboard and scorecard segment is on fire as companies strive to expand the use of PM across the business, dashboards are appearing in all manner of forms, from dedicated products to components of other applications.
BI will also grow substantially, reaching $6.35 billion with a growth rate of 10%. This upswing is due in part to a new generation of products available from best-in-class vendors and the introduction of new and expanded products from enterprise and technology platforms.
The planning, budgeting, and forecasting (PBF) segment will experience a slight decline in 2006—$4.01 billion compared to $4.14 billion in 2005. Still, PBF was referenced as the most strategically important PM investment for 2006.
Spending on analytics applications has dropped substantially, by 17%. Analytics infrastructure spending decreases by 4%, a more moderate decline.
The biggest impediments companies report in deploying PM are access to enterprise-wide data and data from customers and suppliers outside of the firm.
According to the study, nearly 75% of companies are involved in some level of performance management standardization across their business. This demonstrates that buying intentions are influenced by industry and existing relationships.
Buying camps are forming around best-of-breed, enterprise, and technology platform providers. This dynamic will lead to a more competitive market for vendors in 2006.
The report, “Trends in Performance Management Spending, 2006” also uncovers customer preferences in procuring software for PM. 80% of survey respondents prefer the traditional purchase models of seat-based pricing, site licenses, term licenses, and value-based pricing.
Depending on the PM investment area, 17% to 23% of companies would prefer a software-as-a-service or an on-demand purchase option. Service companies prefer these models significantly more than manufacturers.
Survey Methodology:
The information contained in this release is from a detailed survey conducted in late 2005 of more than 200 IT and business leaders across all industry sectors within North America.