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04/13/1998

Growth In “Middle” Accounting Software Market To Outpace “Enterprise” Market Through 2002, According To IDC

FRAMINGHAM, Mass., April 13, 1998 — Worldwide packaged accounting software revenues are expected to grow at a strong 15 percent compound annual growth rate, driving revenues to $10.4 billion by the year 2002, according to research

from International Data Corporation's 1997 Accounting Software: Worldwide Market and Trends by Mid Market and Other Segments report.

The "small-enterprise" market (companies targeted with revenues of $250 million to $1 billion) is expected to remain the largest of five company segments within the worldwide packaged accounting software market. The "corporate or

middle-market" ($20 to $249 million) will outpace the "enterprise" sector (greater than $1 billion) to become the second largest revenue generating segment. "A collision between companies traditionally offering low-end products and companies traditionally providing higher-end products will culminate in the middle market," said Judy Hodges, research manager, Cross-Industry Applications. "The limited number of capable VARs is inhibiting market expansion. Attracting

these VARs will be a key success factor for companies competing in the middle market."

Key Observations

JD Edwards leads in the middle market segment based on 1997 revenue, but will have to fend off intense competition from SAP, which holds a close second place, as well as Oracle, Baan, and PeopleSoft, which announced mid-market

strategies during 1997.

Traditional vendors with products focused on the middle market, including Great Plains, Solomon Software, Computer Associates, and Navision Software are among the top 10 vendors in the middle market. Successful implementation of key strategies introduced in 1997 and continued product investments during 1998 will be key determinants in gaining strong market position.

A flood of NT products became available and began selling very successfully in 1997. NT is the platform enterprise applications vendors are planning to ride into the middle-market segment.

Competition for quality VARs will mount as the vendors of higher-end enterprise accounting software, such as SAP and Oracle, become more aggressive at pushing their products in the midrange market.

SAP dominates the worldwide accounting software market with worldwide revenue of $944.9 million and also leads in the enterprise and small enterprise segments.

PeopleSoft showed the greatest overall accounting software market growth in97 with a 127.7 percent increase catapulting it to a number four ranking.

IDC's extensive report contains analysis of the market opportunity and competition in the crucial "middle" accounting software segment along with a review of vendor, technology, channel, and regional trends and challenges. Comprehensive worldwide data of accounting software license and maintenance revenues includes:

Annual forecasts by five major company revenue size segments through 2002

1997 estimates, growth rates and market share

1997 estimates generated by vendors within each of the five major company size segments

1997 estimates broken out by U.S., European, Asia/Pacific, Canada and ROW geographic regions

The 1997 Accounting Software: Worldwide Market and Trends by Mid Market and Other Segments report (IDC # B15254) is available for purchase by contacting Cheryl Toffel at 800-343-4952 ext. 4389. Visit IDC's web site (www.idc.com) to review an abstract and table of contents. For additional information about IDC's Cross-Industry Applications service, please contact Tony Membrino at 508-935-4334 or tmembrino@idcresearch.com.

About IDC

Headquartered in Framingham, Mass., International Data Corporation provides IT market research and consulting to more than 3,900 high-technology customers around the world. With a global network of 375 analysts in more than 40 countries, IDC is the industry's most comprehensive resource on worldwide IT markets, products, vendors, and geographies.

IDC/LINK, an IDC subsidiary, researches and analyzes the home computing market, leading-edge technologies in telecommunications and new media, and the convergence of computing and consumer electronics.

IDC's World Wide Web site (http://www.idc.com) contains additional company information and recent news releases and offers full-text searching of recent research.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

All product and company names may be trademarks or registered trademarks of their respective holders.

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