This is only slightly less than the 15% CAGR rate seen between 2002 and 2008 and compares favourably with growth of just seven to eight per cent for overall buy-side spending.

TowerGroup says, with rapid growth in trade volumes demanding that workflow become more efficient and effective, OMS applications have an increasingly critical role to play in the asset management business for traders as well as portfolio managers and operations staff.

After intense merger and acquisition activity over the last three years, OMS vendors have "emerged successful and deeply entrenched in the buy-side business", says the analyst house.

The US and UK markets may be saturated, but TowerGroup pinpoints strong growth opportunities for continental Europe, the Middle East, Asia including China and India, and South America.

Vendors that roll out new functionality to support derivatives trading and wealth management will extend their franchise into new areas and pick up significantly greater business in the next two to four years, says the report.

Last year TowerGroup also predicted healthy growth for buy-side spending on research technology, from $586m in 2007 to $1.1bn by 2010 - a CAGR of 22%.