Strong Demand Will Drive GRC Software Revenues to $11.8 Billion in 2021
The market for governance, risk and compliance (GRC) software is expected to experience strong growth as business leaders look for solutions to meet the challenges of regulatory change, cybersecurity threats, third-party exposure, and reputation risk. In the first forecast to size the overall GRC software market, IDC sees worldwide revenues reaching $11.8 billion in 2021, growing at a compound annual rate of 6.7% over the 2016-2021 forecast period.
A number of factors are driving the growth in demand for GRC applications. Regulatory compliance has become increasingly complex and corporate governance, risk and compliance initiatives have come under greater scrutiny. Given the financial and reputational impact of high visibility compliance and security breaches, risk management has become a strategic level conversation, discussed among the C-suite and corporate board.
At the same time, risk management responsibilities have started to shift downward toward the line of business owner as the first line of defense, making user engagement, ease of use, and integration with other enterprise applications just as important as reporting.
"Successful GRC vendors are developing more intuitive and configurable platforms, providing expanded integration and content options, and focusing on user engagement through automated reporting, alerting, and mobile accessibility," said Angela Gelnaw, senior research analyst, Legal, Risk & Compliance Solutions.
Another important factor driving growth in the GRC market is the rise of cloud solutions, which are growing faster than the overall market. Adoption of GRC applications among small and medium-sized businesses, line of business managers, and less-regulated industries have been central to the growth of these cloud-based solutions.
IDC defines governance, risk and compliance software as the aggregation of the tools required to help an enterprise identify, track, and analyze enterprise and technology risks and to monitor and manage corporate and IT governance and compliance initiatives to enhance performance and stay in compliance with global laws and regulations, industry standards, and company policies.
IDC recognizes five segments in the GRC software market: GRC Integrated Suites, Corporate Governance & Compliance Management applications, Enterprise Risk Management applications, Audit Management solutions, and Business Resiliency applications. The GRC Integrated Suites segment comprises about 20% of the overall market and is expected to experience healthy growth throughout the forecast. The rest of the GRC market is fragmented across the other four segments.