Application Mkts Driven By Collaboration, CRM In 2012: IDC

International Data Corporation (IDC) released the latest results from the Worldwide Semiannual Software Tracker. For the first half of 2012 (1H12), the worldwide software market grew 4.7 percent year over year reaching a total market size of $167 million, which was in line with IDC’s forecast. IDC expects 2012 to be the beginning of a more conservative growth period with gains in the single digits, down slightly from the growth experienced in 2010 and 2011.

On a regional basis, the overall software market was heavily influenced by the downward trend in Western Europe, which represents more than 27 percent of the worldwide market and was the only region to experience negative growth in 1H12. The U.S. market, which represents more than 45 percent of the overall market, grew 6.8 percent year over year while the emerging markets in Latin America and Asia/Pacific (excluding Japan) also experienced solid year-over-year growth. The countries with the greatest growth in 1H12 were Colombia, Russia, Philippines, China, Peru, and New Zealand.

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Among the three primary segments of “commercial” software in IDC’s software taxonomy, the Applications segment, which holds almost 49 percent of overall market share, was the fastest growing market group with a 5.1 percent year-over-year growth rate. The Applications market was largely driven by the Collaborative Applications and CRM Applications markets. Within the other two primary “commercial” software segments, Application Development and Deployment (AD&D) and System Infrastructure Software, the most positive growth rates came from the Virtualisation-related markets.
In the Collaborative Applications segment, Team Collaborative Applications and Enterprise Social Software stand out with strong growth rates over the last two years. Not surprisingly, the Enterprise Social Software has moved from 3 percent market share within the Collaborative Applications secondary market in 2008 to more than 11 percent in the first half of 2012. Meanwhile, the Team Collaborative Applications market grew almost 15 percent during the first half of 2012.

“Increasingly, companies are thinking of social solutions as decision support and ad hoc work facilitators and are looking for richer features that integrate data and content with people and systems,” said Vanessa Thompson, research manager, Enterprise Social Networks and Collaborative Technologies. “In the new collaborative enterprise, companies are extending asynchronous data and content sharing capabilities to enable collaboration with a broader range of external constituents, including customers, partners, and suppliers.”

Among the Enterprise Applications markets, the Customer Relationship Management Applications market stands out as three out of four CRM market segments performed at a double-digit rate in 1H12. The only CRM segment that experienced single-digit growth was the Contact Center market. The other three markets, Customer Service, Marketing, and Sales, had a combined growth rate over 12 percent.
“The CRM applications market experienced a rebound effect in 2011 that is being carried through well into 2012. The ‘century of the customer’ has centered on increasing customer experience and, powered by social media, is motivating organisations to invest in their customer handling infrastructure. The move to interact with customers when, where, and how they want is changing the go-to-market strategies of many organisations. Technology is now a requirement to be able to deliver consistency at scale,” said Mary Wardley, Program Vice President, CRM Applications and Customer Experience.

Both virtualisation markets, Virtual Machine and Cloud System Software and Virtual Client Computing, were among the fastest growing software markets. The Virtual Machine and Could System Software market experienced somewhat lower growth of 17.8 percent in 1H12 while the Virtual Client Computing market maintained the low double-digit growth rate it has experienced over the past three years. Other virtuali`sation-related technologies, such as the Workload Scheduling and Automation market, are following the same high-growth patterns as the core technology segments.

“Virtual machine software unit shipments still remain healthy and growing, but have seen some slowdown in mature markets that have high virtualisation rates. Business models are shifting as well, with the hypervisor drawing less direct revenue and increasingly becoming an embedded feature of operating systems and cloud system software. Competition in the market is fiercer than ever, with vendors like Microsoft and Red Hat challenging market leader VMware with increasingly capable and cheaper solutions. Cloud system software, which includes platforms such as vCloud, OpenStack, and CloudStack, remains a nascent market, but holds a lot of promise as customers evolve from virtualised infrastructure to cloud infrastructure. On the client side, virtual client computing remains on a steady growth path as the industry matures its solutions and customers begin to transform their desktops and workspaces,” said Gary Chen, Research Manager, Cloud and Virtualisation System Software.