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Market overview
Lemonsoft operates on the Finnish ERP market (Enterprise Resource Planning, ERP) with SaaS solutions as its core competence. Our addressable market mainly includes small and medium-sized enterprises in the customer industries of industrial manufacturing, wholesale and retail, professional services automation, accounting firms and construction.
The company’s management estimates that, in terms of market share measured by the number of customers in the SME ERP market, Lemonsoft is
- the largest operator in the industry of industrial manufacturing and wholesale and retail
- second largest operator in the industry of professional services automation and construction companies
- the fourth largest operator in the industry of accounting firms
The numbers of customers publicly announced by the largests competitors were used in the analysis. Lemonsoft competes both with companies that specialise in certain industries or provide special partial solutions and with companies producing more comprehensive ERP solutions.
The changing ERP market
The ERP market is in a state of disruption as customers are transitioning from on-premise software that is locally installed on work stations, and that requires separate maintenance for the customer, towards cloud-based SaaS solutions at an increasingly fast pace.
The management estimates that the size of Lemonsoft’s addressable market is approximately EUR 290 million and that the full potential of the addressable market in Finland is approximately EUR 2 billion. The market growth from its current size towards its full potential is driven by growth in ERP system penetration and by increase in the average ERP spend per customer.
ERP penetration among Finnish companies was 43 percent in 2019, when in 2009 it was only 16 percent.
The number of potential customer companies exceeds 192,0001 and is split as follows:
- more than 15,000 companies in industrial manufacturing
- more than 34,000 in wholesale and retail
- more than 108,000 in professional services automation
- more than 4,000 in accounting firms
- more than 31,000 in the construction sector
In addition to the ERP system penetration, we estimate that the market potential is driven by the expansion of the use of ERP tools in companies that use ERP systems.
The size and potential of the addressable market2
1 1 Source: Statistics Finland (Use of information technology in enterprises, 5. Digitalisation of business, Graph 16. The company uses an ERP system 2009–2019, share of all companies employing at least 10 persons).
2 Sources: With respect to potential customers, Asiakastieto (search in the service provider’s company database including corporate forms public limited company, limited company, private trader, limited partnership, general partnership and limited liability housing company as well as companies in accordance with Standard Industrial Classification TOL 2008, that may use ERP in the view of the Company’s management) and with respect to ERP system penetration, Statistics Finland (Use of information technology in enterprises, 5. Digitalisation of business, Graph 16. The company uses an ERP system 2009–2019, share of all companies employing at least 10 persons).