A new IDC study has found that competition is heating up among vendors in the Western European enterprise resource planning (ERP) applications market.

SAP's overall ERP applications market share lead made it the leader in all verticals in Western Europe in 2005, but at the country level, Oracle and Sage are now challenging SAP's leadership in verticals such as communications, public sector, finance, business services, and retail/wholesale in countries such as the UK and France.

"Oracle leaped ahead in its focus industries with its acquisition of PeopleSoft, while Sage has improved its position across most verticals via its domination of the small and midsize company segment in Europe, an improvement driven by both acquisitions and organic growth," said Bo Lykkegaard, program manager for Western European enterprise applications at IDC.

Manufacturing makes up approximately 40% of the total ERP applications market, with discrete manufacturing being significantly larger than process manufacturing.

Retail/wholesale is the third largest ERP industry segment. Traditional IT intensive industries, financial services and communications, make up only 15% of the market when combined. The public sector makes up another 15%.

Lykkegaard predicted further industry concentration ahead in the ERP applications market. "This concentration will largely be acquisition-driven. Infor's recent acquisitions of SSA Global, Geac, and Systems Union will catapult it ahead in the manufacturing and distribution sectors," he said.