Modest growth projected for worldwide software revenues
Modest growth projected for worldwide software revenues
Nov 05, 2004: Though the software market has turned the corner in terms of getting revenues on an upward trajectory again, the next few years are set to deliver fairly modest growth figures in the sector.
That is according to IDC, whose latest report on worldwide software revenue recorded an increase of 5.1 percent to US$178 billion (AU$235 billion) in 2003, with the figure projected to rise to US$189 billion (AU$249 billion) in 2004. Over one-third of 2003 worldwide revenue was attributable to the five leading vendors: Microsoft, IBM, Oracle, SAP, and Computer Associates.
"Even though the software industry is recovering from its first-ever decline, the double-digit growth rates experienced in the last decade will not return in the foreseeable future," said Dr. Anthony Picardi, senior vice president of Global Software at IDC. "Issues of complexity, security, and software quality, as well as a myriad of changing macroeconomic factors all pose continuing challenges to industry growth."
Despite the challenges, IDC predicts that through 2003-2008, the market will achieve a compound annual growth rate (CAGR) of 6.9 percent. North America will remain the largest single market, accounting for slightly over one-half of worldwide packaged software consumption in 2003, but emerging markets in Asia and Central Europe will represent the fastest-growing opportunity, though these markets will also be the most demanding in terms of piracy, price, and political uncertainty.
IDC also predicts that as the software industry matures, growth will be driven by a host of smaller initiatives. It believes successful vendors will follow one or more strategies that include the implementation of usage-based software business modes, the enablement of software-as-service processes, the exploitation of niche clusters, and the formation of solution coalitions.
Good news for Linux advocates comes in the shape of IDC's prediction that Linux operating environments are expected to continue to grow rapidly, propelling open source from its current seventh place to the fourth most-popular platform for software by the end of the forecast period.
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