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Worldwide software revenue totaled $407.3 billion in 2013, a 4.8 percent increase from 2012 revenue of $388.5 billion, according to a report from IT research firm Gartner.
Microsoft held a dominant market lead with 65.7 percent share, followed by Oracle with nearly 30 percent. IBM, SAP and Symantec rounded out the top five vendors.
Salesforce.com, with more than $3.8 billion in revenue during 2013, climbed two positions to capture the tenth slot of the worldwide enterprise software market and achieved the highest growth among the top 10 vendors at 33.3 percent, according to the report.
“There is a shift in vendor rankings from 2013 at the top of the worldwide software market,” Chad Eschinger, research vice president at Gartner, said in a statement. “This is the first time in Gartner’s global software market share research that Oracle has ranked second in terms of total software revenue with $29.6 billion and capturing 7.3 percent of the global market. Global trends around big data and analytics with business investment in database and cloud-based applications helped to drive Oracle’s top-line growth.”
The report noted the software industry is in the middle of a multiyear cyclical transition as organizations focus investment on technologies to support existing system structure, in order to maintain competitiveness, while still taking advantage of cloud and subscription-based pricing where it makes sense to grow and advance the business.
“The software market has been changing shape over the past five years, and cloud is driving the bulk of this change as software vendors acquire and provide applications and infrastructure technology to support the cloud and the Internet of things (IoT) movement,” Joanne Correia, research vice president at Gartner, said in a statement. “A clear indicator of this is that for the first time we have a pure cloud vendor in the top 10.”
The IoT refers to a network of physical objects containing embedded technology to communicate with their internal states or the external environment. The term encompasses hardware (the things themselves), embedded software, communications services and information services associated with the things.
“Investors continue to focus on revenue growth and market share gains as the primary criteria when evaluating vendors,” John Rizzuto, research vice president and Invest analyst at Gartner, said in a statement. “At this point, the new and emerging technology markets in software, such as digital marketing and public cloud computing, are so nascent that investors are favoring those companies that are early and aggressive in grabbing both market and mind share—in many cases dismissing progress on earnings and cash flow in hopes that they will one day follow.”