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  • Enterprise Software Spending Grows Faster Than Expected

    May 23, 2011 Timothy Prickett Morgan

    The enterprise software market–everything from the hypervisor up through the operating system to databases, middleware, and applications–got back on something akin to an even keel as 2010 came to a close, according to the latest statistics from Gartner.

    That enterprise software stack also includes corporate purchases of Windows, Mac OS, and Linux operating systems for PCs and laptops as well as applications for PCs, so the money does mount up. To $244.6 billion, in fact, which is 8.5 percent higher than spending on the same kinds of enterprise software in 2009, when the world was just starting to consider emerging from the Great Recession.

    Microsoft pocketed $54.7 billion in 2010 for all of its corporate software, according to Gartner, an increase of 12.5 percent and representing half again as much growth compared to the market at large. The fact that Windows 7 is a pretty decent operating system–I have installed it on four machines so far, without any trouble, myself, which surprised the heck out of me, to tell the truth–and companies are also upgrading to Office 2010 in tandem with their Windows 7 jump has helped Microsoft a lot. The growth for Windows Server and adjunct programs is also helping to fuel Microsoft’s growth in enterprise software. Microsoft has a healthy application software biz, too.

    IBM, thanks to its mainframes as well as its databases and middleware, managed to stay ahead of Oracle in the enterprise software rankings–but just barely. Big Blue’s enterprise software sales grew slower than the market at large, only up 5.7 percent to $25.4 billion by Gartner’s math. Oracle, thanks to the Sun Microsystems acquisition last year as well as organic growth, jumped 19.4 percent in 2010, to $23.9 billion.

    German software powerhouse SAP might be the leader in application software for midrange and large enterprises, but it is only half the size of Oracle and IBM, at just under $13 billion in sales. SAP did, despite its woes, manage to grow by 13.9 percent in 2010, keeping pace with Microsoft and outpacing Big Blue. Symantec, which sells security software for PCs and servers as well as file systems and backup software used in the data center, raked in $5.65 billion, and grew only 2.6 percent.

    Other software vendors in the enterprise area–including many fast-growing companies–accounted for $121.9 billion, growing only 5.3 percent from 2009 but showing that there is still a fair amount of diversity in the enterprise software space. In servers and storage, the top five vendors account for the lion’s share of revenues and shipments, not half. The fast growers included VMware (up 41 percent), Adobe (up 29 percent), and Salesforce.com (up 28 percent). Yup, Gartner says SaaS software vendors are enterprise software sellers, even if they don’t have perpetual licenses running in your data center. Seems reasonable to me.

    “The year represented a return to solid footing as the market recovered and expanded in terms of revenue and geographies,” explained Joanne Correia, the managing vice president at Gartner who put together the software numbers, in a statement. “However, some regions did not recover as rapidly as others. Japan and Western Europe saw relatively modest dollar-denominated growth, while Latin America and Asia/Pacific saw growth in the mid-to-high teens, nearly double the market average.”

    Spending picked up considerably as 2010 came to a close. Gartner had been projecting that enterprise software revenues would only rise by 4.5 percent, to $232 billion, after falling 2.6 percent in 2009.

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Volume 20, Number 19 -- May 23, 2011
THIS ISSUE SPONSORED BY:

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Table of Contents

  • IBM i Chief Architect Tells Us Where We’re At
  • Is Constellation Software on the Block?
  • Still Wanted: A Cheap–or Free—IBM i Development Workstation
  • As I See It: The Finer Points of Relating
  • Enterprise Software Spending Grows Faster Than Expected
  • Aberdeen Examines BI in the Supply Chain
  • Avnet Rides Server and Storage Waves in Fiscal Q3
  • Blue Skies Are Gonna Cloud Up
  • Red Hat, IBM, and Friends Gang Up On VMware, Ignore PowerVM
  • Attachmate Busts Apart SUSE from Novell, Puts Own People in Charge

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