Enterprise Applications Revenue Grew 12 Percent in 2023

The enterprise applications market delivered solid revenue growth in 2023 as AI and particularly GenAI) has started to reshape the employee and customer experience of business software. According to a new report from IDC, the enterprise applications market grew 12.0% year over year in 2023 with worldwide revenues reaching $356 billion.

The integration of AI and GenAI into enterprise applications brings more intelligence, faster time to insights, and enhanced decision velocity to users. As a result, employees can have a greater reliance on enterprise software as coworkers to help solve business problems and navigate the dynamic world of change. All of this is possible with increased reliance on cloud technology as the foundation from which to innovate fast, quickly changing up the employee, customer, and partner experiences resulting in faster time to value and competitive differentiation.

"SaaS and cloud-enabled applications continue their growth across the enterprise applications market. With new innovations such as generative AI and its plethora of use cases, the opportunity to reshape businesses with intelligent technology using cloud applications brings greater competitive advantage," said Mickey North Rizza, group vice president of Enterprise Software at IDC. "Experience-orchestrated (X-O) businesses are leveraging more modern, innovative, and intelligent enterprise applications, improving their decision velocity with smarter business decisions and ultimately bringing greater differentiation for organizations globally."

The top 5 enterprise application vendors in 2023 were SAP, Salesforce, Oracle, Microsoft, and Intuit, which together accounted for 21.2% of worldwide revenues. With just 0.2% of market share separating SAP and Salesforce, IDC regards these two companies as statistically tied for the number 1 position in the worldwide enterprise applications market for 2023. IDC forecasts worldwide revenues for the enterprise applications market will be more than $600 billion in 2028 as organizations further integrate traditional AI, machine learning, and GenAI into workflows, creating faster and more intelligent insights and decisions.

Organizations will also invest in new tools to keep their application portfolio up to date as they move further into the digital era. Meanwhile, the public cloud will become the foundational deployment model for enterprise applications software, accounting for more than 70% of new spending in 2028. Demand for public cloud-based enterprise applications is forecast to produce a five-year compound annual growth rate (CAGR) of 16.5%, surpassing the 11.1% CAGR for the overall market.