Enterprise software market growth heralds recovery, says Gartner

The worldwide enterprise software market grew 8.5% to $245b in 2010, signalling a recovery from the recession, says research firm Gartner.

The worldwide enterprise software market grew 8.5% to $245b in 2010, signalling a recovery from the recession, says research firm Gartner.

The growth contrasts with a 2.5% decline in worldwide enterprise software revenue in 2009, with major software vendors expanding product portfolios and reaching deeper into emerging markets.

"The year represented a return to solid footing as the market recovered and expanded in terms of revenue and geographies, but some regions did not recover as rapidly as others," said Joanne Correia, managing vice-president at Gartner.

Japan and Western Europe saw relatively modest growth, while Latin America and Asia/Pacific saw growth in the mid-to-high teens, nearly double the market average, she says.

Three of the top five vendors had revenue gains above the industry average, with Microsoft holding top position, increasing its global enterprise software revenue share to 22.4%.

Growth results were enhanced in 2010 by the broader adoption of new releases of the Windows 7 operating system and Microsoft Office 2010 productivity software.

Microsoft's results have been improved by strategies aimed not only at individuals, but also at organisations and multiple delivery models. The company is placing more emphasis on enterprise application and infrastructure software programming platforms, says Gartner.

Gartner table

IBM maintained its number two ranking in 2010 as it had in 2009, but would be number one, says Gartner, if consumer sales of Microsoft Office and operating systems were excluded. IBM sells only to businesses and partners.

IBM's software revenue grew more than 5.7% in 2010, mainly due to its WebSphere, Tivoli, Information Management, Operating Systems and Rational brands. IBM expanded in 2010 into applications with a focus on e-commerce, marketing and sales, says Gartner.

Oracle showed the strongest growth among the top five vendors, as it increased its revenue 19.4%. Growth was achieved across all software markets, with faster growth emerging from its business intelligence, security, IT operations, data integration and quality tools offerings.

Oracle has kept most acquired technologies intact while integrating the infrastructure and middleware into Oracle Fusion Middleware (OFM) 11g with some integration across the application portfolio. Oracle expects continued market momentum in its industry offerings, middleware, data quality and integration tools, master data management, database CRM and SCM products.

Among the top 25 vendors, VMware led the group with more than 41% growth in 2010, followed by Adobe with more than 29% and salesforce.com with more than 28% growth.

See the full report here.

"The enterprise software vendor landscape continues to change," said Tom Eid, research vice-president at Gartner.

"Mergers and acquisitions (M&As) are expected to continue as vendors and service providers look to expand their customer bases, add unique features aligned to a vertical-market or technology function, and improve overall market presence," added Tom Eid.

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