European HR software market is booming

9 Oct 2007

The European market for human capital management technologies including applications for e-recruitment and payroll grew 13pc last year and is representing a major growth segment for enterprise software players, according to IDC.

The combined human capital management (HCM) and payroll applications market, measured in licenses and maintenance, last year reached a value of €1.5bn.

Oracle, Sage and Unit 4 Agresso stood out with double-digit growth in 2006. SAP and Cegid also had a strong year with 10pc growth, followed by Northgate, Personec, Personal & Infomatik and DATEV.

ADP saw declining license and maintenance revenues in 2006.

“The HCM market is truly undergoing significant change, and in 2006 we witnessed many key changes including an on-demand segment seeing dramatic 72pc growth, while regional HCM and payroll specialists turned their focus towards BPO services,” said Bo Lykkegaard, programme manager, IDC European Enterprise Applications.

“Newer HCM segments such as e-recruiting, HR performance management, and incentive management appear on a path of sustainable, high growth.

“These segments are dominated by best-of-breed vendors that are leveraging deep domain expertise as well as new delivery formats, such as on-demand, to win new customers.

“However, looking forward, the IDC Leadership Grid analysis shows that ERP [enterprise resource planning] giants SAP and Oracle are well positioned for future market share gains as the HCM market matures further,” Lykkegaard said.

By John Kennedy