A report by New York-based consulting firm AMI-Partners predicts the North American small and midsize business market for application software and services is poised to become a $35 billion spending opportunity by 2013.

AMI estimates that spending will expand at a 6 percent CAGR (compound annual growth rate) in the next five years. Although the company admits the economic downturn will restrict expenditures (below one percent growth) through 2009, AMI predicts a return to stronger growth should resume in the latter half of 2010.

The findings came from the AMI study, “2009 Overview of the Business & Enterprise Application Software and Services Market,” which provides a perspective on growth opportunities in the North America SMB market. AMI’s report forecasts high single-digit CAGRs for on-premises enterprise software during the period from 2008 to 2013, and predicts double-digit growth for SAAS (software as a service)-based offerings.

The company says midmarket firms are becoming an increasingly attractive growth segment for enterprise application software and hosted services vendors. While spending on operating systems and traditional productivity software is slowing, in part, due to declining PC shipments, AMI finds SMBs continue to invest in solutions that promise to deliver stronger cost effectiveness, business efficiencies as well as customer intimacy.

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