A small number of software suppliers are increasingly dominating the local government market, figures from the Society of IT Management (Socitm) have revealed.
Socitm’s ninth annual Application Software Index – which looks at 82 categories of applications in 343 local councils and 96 other public authorities – highlights the way companies such as Anite, Northgate Information Systems, ESRI, Capita, Civica and Mapinfo have snapped up significant shares of the market.
The sharpest example is in schools administrative systems, where Capita has a 66% market share, survey editor Brian Westcott said. The next largest suppliers in this field come in at around the 8% mark, he added.
Market dominance by a small number of suppliers was more apparent for well established systems, such as planning and development control, Westcott said. The biggest supplier of these applications was ESRI, with just under 42% of the market followed by Northgate with 16.7%.
Westcott said Northgate had a presence in “pretty well every main application” area, with 19% of the personnel systems market and 22% of payroll, where it is followed by Midland Software on 20%.
In the newer field of customer relationship management systems, consolidation of the market is also showing up, with Lagan taking a 20% share, followed by Northgate on 17%.
Aggressive marketing and strategic acquisitions have bolstered the position of the big players, the Socitm report argues.
But many local authorities were using systems from enterprise resource planning vendors SAP and Oracle, which are not targeted particularly at the public sector market.
Westcott, who has been carrying out the survey since 1999, said: “When we started the proportion of systems developed and maintained in-house was much higher than now, particularly for established systems. But you’ve now got seven or eight companies that have large [market] shares.”
But he added: “For all the applications there is still a reasonable choice for local authorities.”
Westcott said: “I think there is a good argument for having three or four major suppliers for any one application. We don’t want a situation where one company is the only supplier because that would affect price and quality.”
He cautioned against selecting software from suppliers used only by a small number of other authorities where “the chances of them going bust or pulling out of the market is quite high”.
Many authorities, particularly the smaller ones, still had “a lot of software around from the 1980s and early 1990s”, Westcott noted.