And they’re off!

AMR Research has fired the starting gun for what the firm’s brain trust has forecast as a “neck and neck race” in the human capital management market between Oracle and SAP. In a pair of newly released reports, AMR Research analysts examined enterprise application segments.

Key among the findings was the statistic putting human capital management and customer management as the fastest-growing enterprise application segments with a rate of ten percent. The HCM market, wrote report authors, is fueled by interest in automating personnel-related processes while the CRM market continues to go via new delivery models such as software-as-a-service.

AMR data went on to suggest that the core enterprise resource planning market will see a meager three percent growth rate in the near future. As for the bottom line, the AMR report on HCM places Oracle at number one in the field. AMR analysts cited the acquisition of PeopleSoft in 2004 as responsible for vaulting Oracle over bitter rival SAP. In 2005, Oracle reportedly held a 26 percent share in HCM revenue; SAP was at 23 percent. Third-place Kronos accounted for a ten percent market share.

However, AMR analysis forecasts a growth rate of just ten percent for Oracle revenue in the market, while SAP’s is expected to increase by at least 13 percent. Kronos boasts an eleven percent growth rate. “2005 was a pivotal year in the HCM space, as the uncertainty around the future of PeopleSoft dissipated, and SAP made its offering easier … to use,” said AMR Research director Christa Degnan Manning. “It will be a neck and neck race between [Oracle and SAP] this year.” If AMR numbers are to be believed, Oracle and SAP will approach identical one-quarter slices of the HCM pie and own essentially half the market.

The reports reported that hosted revenue, primarily from software-as-a-service, could be thanked for the industry’s overall sixty percent growth rate in 2005. (Rob Bois, research director at AMR Research, was scintillatingly quoted as stated that “Software-as-a-service is on fire,” and Bois sees that heat glowing for “the next several years.”) One big winner here was Salesforce.com, moving with a bullet up the charts from lowly no. 12 spot in 2004 all the way up to no. 6 in 2005 and continuing to rise with a forecasted 52 percent increase in 2006.

And there was even a happy ending provided by Bois for the industry at large: “Customer management applications may be returning to their glory days,” he said. The reports are part of the AMR Research Market Analytix Report Series. For more information or a copy of the full HCM or CRM report, AMR Research requests phone calls (really) at 1.617.542.6600. Founded in 1986, AMR Research is an advisory firm focused on supply chain, enterprise applications, and infrastructure.

The AMR Research Market Analytix Report Series provides technology vendors with targeted marketing and competitive information on key application markets of ERP, SCM, CRM, procurement and sourcing, PLM, and HCM.