London, 10 Jan 2011 — The explosion in popularity of mobile devices such as smart phones and tablets, the consumerisation of technology, and the adoption of cloud computing are global trends forcing software companies to rethink their business models, collaborate more closely than ever before and focus even more sharply on the changing behaviours and needs of their customers.
These forces are impacting the design and deployment of software, the delivery channels used for distribution of software and the economics of software licensing. The rapid growth in use of mobile devices has also transformed customer behaviours relating to acquisition and use of software. Customers are also increasingly focused on software as an element of the solution to their challenges versus merely a product.
According to a new report from PwC “Global Software leaders key players & market trends”, the $250 billion software market is driving many of these technological and societal innovations. It’s also contributing to overall productivity and growth of the global economy because of the high levels of competitiveness and innovation it brings to other industries.
The report, issued today, highlights major trends impacting software companies and includes the thoughts and insights of leading software executives on the direction of the industry and the challenges ahead. It also includes a listing of the Global and European Top 100 Software vendors, together with rankings in China, France, Germany, India, the UK and US. A profile of the rapidly expanding software gaming segment is also included.
Commented Raman Chitkara, Global Technology Industry Leader:
“Today’s digital consumer, whether customer, employee, vendor or partner, is driving the rapid change we’re seeing in the software market. The companies that recognise and embrace these new ways of working and interacting will likely be the future leaders.
“The resurgence of capital markets, including venture capital and private equity investments, along with technologies such as cloud computing, are helping to keep innovation alive within the sector. Consolidation in the sector continues at a torrid pace as companies continually re-evaluate their strategic priorities and inorganically fill important gaps in their product offerings.”
Global Top 100 Software Vendors
Microsoft leads the ranking of the top 100 global software vendors followed by IBM, Oracle, SAP and EMC. The rankings are based on the product (licence and maintenance) and subscription revenues earned by the local companies.
|
Rank |
Company |
Nat |
Software Revenue �M |
Total Revenue �M |
Software Revenue |
|
1 |
Microsoft * |
US |
32,686 |
42,504 |
77% |
|
2 |
IBM |
US |
14,429 |
68,660 |
21% |
|
3 |
Oracle |
US |
13,854 |
16,758 |
83% |
|
4 |
SAP |
DE |
8,111 |
10,672 |
76% |
|
5 |
EMC (inc VMware & RSA) |
US |
4,244 |
10,057 |
42% |
|
6 |
Symantec |
US |
3,696 |
4,234 |
94% |
|
7 |
HP |
US |
3,065 |
83,807 |
4% |
|
8 |
CA |
US |
2,825 |
3,080 |
92% |
|
9 |
Intuit |
US |
2,299 |
2,340 |
98% |
|
10 |
Adobe |
US |
2,067 |
2,127 |
97% |
*excluding gaming revenue
Though IBM’s total overall revenue is greater than that of Microsoft, Microsoft derives a higher percentage of its revenue from software giving it first place in the ranking.
China Top 100
The increasing globalisation of the Chinese economy offers great opportunities for software enterprises but the speed of the change in this fast developing market also poses challenges for software vendors. A highly fragmented market, the top 5 vendors account for 40 per cent of the overall revenues of the top 1oo software vendors in China and though the market remains small compared to the US or Europe, it is expected to be dynamic and fast-changing in the years to come.
France Top 100
The French software market is concentrated around a few key players with Dassault Systemes alone accounting for 31 per cent of the top 100 software vendors overall revenues. Beyond these few key players, the market remains heavily fragmented. The emergence of new players with critical mass, therefore, remains a priority, leveraging key country strengths that should act as catalysts for the software industry: a talented pool of educated engineers, favourable R&D tax credits, quality of infrastructure, and a vibrant community of innovative start-ups.
Germany Top 100
SAP, the top player in the German market accounts for 74 per cent of the revenues of the top 100 vendors. A strong global brand, SAP is also the largest software vendor in Europe (accounting for 39 per cent of Europe, Middle East & Africa’s combined revenues) and also the only non-US vendor in the top 10 of the global ranking.
India Top 100
Historically the Indian software industry has been associated with software services and this has relegated the software products industry to the background. However, the last decade has seen the number of Indian product companies grow dramatically though many remain small. Recently software product developments in education, healthcare, cleantech and mobile applications are triggering the next wave in India’s software development. Developing and commercialising software products has normally been outside the reach of smaller firms due to the costs involved but new technologies such as Cloud computing have reduced these costs and opened up the field to smaller players. Indian software industry body, NASSCOM, expects the revenue from this industry to be between US$9.5 � 12 billion by 2015.
UK
The UK software market continues to have a strong presence in Europe with half of the top 10 European vendors based in the UK. Sage remains focussed on maintaining its leading position through its SaaS (Software as a service) offering. With cash rich economies hungry for a foothold in Europe and many searching for intellectual property and industry know how, the UK is likely to continue to attract overseas interest.
US
Digital transformation is transforming customer support, sales and marketing, collaboration, media consumption and more, and software providers are rethinking both the software they sell and the software they use themselves to tap this shift in behaviour by digital consumers. Like non-US based software providers, they are not alone in shaping and being shaped by the shifts which are now occurring but they are very clearly leading much of it.
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