Applications are expected to be a major growth category within IT spending for mid-sized business in 2005, with similar results found in the enterprise market as well. In-Stat estimates that mid-sized business firms will spend roughly $16 billion on applications this year including client and server applications, middleware and custom-coded applications. This represents an 8% increase over 2004 estimates. Following telecom services and equipment, this category of IT expenditures is the second largest in terms of expenditures, and accounts for the second highest annual increase in expenditures. By 2009, mid-sized business firms are expected to spend nearly $22 billion on applications.
Roughly half of mid-sized business applications expenditures are from firms with 100 to 249 employees. These firms are expected to spend approximately $8 billion on applications this year, more than an 8% increase from last year. This sub-segment is also expected to experience the highest annual percentage increase in expenditures through 2009. By 2009, firms with 100 to 249 employees are expected to spend nearly $11 billion on applications.