Middleware Market Up, IBM Maintains Lead

According to research company Gartner, the worldwide application infrastructure and middleware software market revenue totaled $14.1 billion in 2007, a 12.9 percent increase from 2006 revenue of $12.5 billion.

Overall growth in the market was led by Microsoft among large vendors, with 41.6 percent revenue growth year over year. However, among the top five vendors listed in the category, Software AG showed the strongest growth with a 107 percent increase from 2006. Yet, the company’s AIM revenue doubled as a result of its acquisition of WebMethods.

Gartner announced its AIM market results at its Gartner AADI (Application Architecture, Development & Integration) Summit, which runs June 9-11 in Orlando, Fla. According to Gartner, the market was primarily driven by strong growth in emerging market segments, such as ESBs (enterprise service buses) and BPMS (business process management suites).

Gartner analysts said vendors are shifting their traditional application infrastructure and middleware products mix toward ESBs and BPMS in response to strong demand for products that support SOA (service-oriented architecture) and process-centric applications.

Meanwhile, IBM is the overall market leader with a 28.9 percent share of what Gartner identifies as the AIM market. Ironically, BEA Systems came in second with 9.3 percent of the market, followed by Oracle with 8.5 percent. However, oracle now owns BEA and will benefit from BEA's market share.

“We expect further consolidation with the dichotomy between megavendors and best-of-breed vendors accentuated by the Oracle acquisition of BEA,” said Gartner analyst Fabrizio Biscotti. “Being a generalist in a consolidated AIM market is a dangerous position. We recommend software vendors to innovate and differentiate their business models and go-to-market strategies by addressing narrower horizontal, vertical or geographic requirements in markets that are reaching functional parity and maturity.”

Meanwhile, despite seeing a high growth rate of more than 40 percent, Microsoft's overall share of the AIM market was only 3 percent, according to the Gartner study.

In 2007, the top five vendors held more than 50 percent of the overall AIM market and are slowly eroding market shares from the smaller vendors primarily through acquisitions and expansion of their middleware suites offerings, Gartner officials said. Although IBM maintained its leading position, "This year is set to be the most challenging for IBM in the middleware segment following the acquisition of BEA by Oracle, which consolidated the second and third position in the AIM software market,” Biscotti said.

Meanwhile, from a regional perspective, North America and Western Europe remained the largest regions worldwide followed by Japan and Asia Pacific. Asia Pacific was the fastest-growing region with 25.4 percent growth in 2007. The performance was fostered by the rapid modernization of IT infrastructure and emerging SMB markets in China and India, Gartner officials said.

Moreover, integration appliances, which is one of 11 segments that Gartner divides the AIM market into, was the fastest-growing segment with an increase of 64 percent in 2007, although growing from a small installed base, Gartner said. ESBs came in second with 39 percent growth—continuing to benefit from the increasing demand for SOA, Gartner officials said.

Co-located with the AADI Summit is Gartner’s Enterprise Architecture Summit, taking place June 11-13.