Global software market to burst into life in 2011 with 8% growth

Global software market to burst into life in 2011 with more than 8% growth

  • Microsoft ranked market leader but innovation remains an issue

The global business software market will burst into life this year, when it will grow by 8.2% to hit $267 billion, according to Ovum.

In a new forecast*, the independent technology analyst predicts that recovery from the global economic downturn will begin in earnest this year for the sector, which did not grow at all in 2010.

The promising outlook means the business software sector will grow at a compound annual growth rate (CAGR) of 7.7% during the next four years, reaching revenues of $358 billion in 2015. The strong growth is driven by exploding volumes of data, increased enterprise mobility, the transition to cloud computing models, and the emerging markets.

The information management software sector will experience the biggest increase in revenues of all the business software areas. This area will grow at a CAGR of almost 10% from 2010 to 2015 as businesses grapple with spiralling volumes of data and try to extract business value from them.

Tim Jennings, Ovum chief analyst, commented: “As the global economy continues its recovery, the emphasis on IT investment is moving from the traditional area of back-office automation and transaction processing towards the exploitation of information to add value to the business.

“The volume of information within enterprises continues to grow at an astonishing rate, and investment is needed to both manage this information and turn it into actionable intelligence, through technologies such as business intelligence and analytics.”

Ovum has also released a new vendor rankings analysis**, which paints a picture of the companies dominating the software space. Microsoft continues to be the world’s number-one software company, with more than 20% market share. It is followed by Oracle, IBM and SAP, in second, third and fourth place respectively.

Ovum principal analyst Richard Edwards commented: “Microsoft is still a major player and market maker, with revenues of $62 billion in 2010. The company has gained huge mass and velocity over the past 20+ years, and this looks set to sustain the company in the short and medium-term.

“However, its level of innovation is not keeping pace with the rest of the market – it is doing just enough to stay in the game, but is not a star performer.”

Although information management software will experience the strongest growth, Ovum’s figures show that all the sectors will enjoy a healthy outlook. The systems infrastructure software market will grow at a CAGR of 8.3% from 2010 to 2015, while applications software will grow at a CAGR of 6.8% during the same period.

Jenningscontinued: “Organisations are breaking away from the shackles of desktop IT and providing mobile workers with access to systems from any location and any device. The mobile revolution will generate strong demand for mobile applications, as well as for the development and management platforms to support this shift.

“Although it is still relatively early days for cloud computing, growth will accelerate over the next five years as organisations move further towards a software-as-a-service model and take their data centres towards hybrid public and private cloud infrastructure. This will generate new demand for both infrastructure and application services.

The emerging markets will also make a substantial contribution to the strong growth the software sector is set to experience.Jenningsadded: “Emerging markets around the world have an insatiable appetite for technology-driven expansion, often unencumbered by the constraints of peers in mature markets. Software vendors have significant opportunities in regions such as South East Asia andLatin Americain the same areas of information management and mobility.”

– ENDS –


*Global Market Trends 2010: Business Software Forecasts

The Ovum software forecasts include software solutions for business. This covers systems infrastructure, enterprise applications, office applications, information management, and security.

**Global Market Trends 2010: Business Software Vendor Rankings and Market Shares

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Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.