Enterprise Software Growth Driven by Big Data, Cloud: IDC

IDC's Worldwide Semiannual Software Tracker provides total market size and vendor share for the 82 segments of the global software market.

The worldwide enterprise software market grew 3.6 percent year over year, reaching a total market size of $342 billion in 2012, according to the latest results from IT research firm IDC's Worldwide Semiannual Software Tracker, which was in line with IDC's previous forecast of 3.4 percent but less than half the growth rate experienced in 2010 and 2011.

The faster growing market segments, including data access, analysis and delivery, collaborative applications, CRM applications, security software, and system and network management software, each grew in the 6 to 7 percent range, about double the rate for enterprise software as a whole.

Big data and analytics are closely tied to the fast growth social business software markets, where the combination of contextual data and the "right" expertise is becoming critical for supporting enterprise decision making and data-driven customer experience solutions, the report revealed.

Oracle continued to lead the application development and deployment (AD&D) segment with steady market share of 21.6 percent, followed by IBM, Microsoft, SAP and SAS. Among these vendors, Microsoft and SAP stood out by each gaining almost a half point of market share year over year.

"The global software market, comprised of a multi-layered collection of technologies and solutions, is growing more slowly in this period of economic uncertainty. Yet there is strong growth in selective areas," Henry D. Morris, senior vice president for worldwide software, services and executive advisory research at IDC, said in a statement. "The management and leveraging of information for competitive advantage is driving growth in markets associated with Big Data and analytics.

"Similarly, rapid growth in cloud deployments is fueling growth in application areas associated with social business and customer experience," Morris said. "The combination of these forces is advancing the growth to what IDC has termed the third platform."

The security software and system/network management software secondary segments both grew more than 6 percent year over year. Although the other two system infrastructure software secondary segments—storage software and system software—had flat growth in 2012, the virtualization subsegments had double-digit growth rates. Microsoft remained the dominant leader in system infrastructure software overall, with more than a quarter (28 percent) of market share, followed by IBM, Symantec, EMC and VMware.

On a regional basis, the overall software market was heavily influenced by the downward trend in Western Europe, which represents 26.5 percent of the worldwide market and was the only region to experience negative growth in 2012. The U.S. market, which represents more than 45 percent of the overall market, grew 6 percent year over year, while the emerging markets in Latin America, Asia/Pacific (excluding Japan), and Central Europe, Middle East and Africa (CEMA) also experienced solid growth in 2012, according to the report.

The IDC study follows a report issued last week by PwC, which indicated enterprise software vendors must rethink their value propositions and the experience they deliver, as the converging forces of cloud, social media, mobile and big data have fundamentally altered the enterprise software sales process.

The company's report, "Experience Radar 2013: Lessons from the U.S. Software Industry," provides an analysis of behavioral profiles for the enterprise software segments, up and coming corporations, emerging empires and big business behemoths. In addition, the report outlines the small to medium-size business (SMB) category across three behavioral segments: midsized movers, elemental establishments and vivacious ventures.