CRM, virtualization and collaboration show strong growth

by CXOtoday News Desk    Nov 08, 2012

global softwareThe worldwide software market grew 4.7 percent reaching a total market size of $167 million in the first half of 2012, according to a recent IDC report. The analyst firm identifies CRM, virtualization and collaboration as the fastest growing segments.

The overall software market was influenced by the downward trend in Western Europe, which represents more than 27 percent of the worldwide market. This is the only region experiencing a negative growth during this period. USA that represents 45 percent of the global software market grew 6.8 percent while emerging markets in Latin America and Asia Pacific including Japan experienced a phenomenal growth in the same period.

In the commercial software segment, the application segment that holds nearly 50 percent of the overall market share witnessed the fastest growth, a 5.1 percent year-over-year growth rate. This segment was largely driven by collaborative applications and CRM applications markets. The enterprise social software segment grew from 3 percent in 2008 to 11 percent in 2012.

Nearly 75 percent of CRM market subcategories showed double-digit growth in 2012, with contact center applications seeing a single-digit increase, according to the IDC tracker. Customer service, sales and marketing had an overall growth rate of about 12 percent. A significant part of this growth can be attributed to the performance of, the industry’s leading pure cloud software vendor, which has products in all four CRM categories and has touched almost $3 billion in annual revenue.

The other big area of growth was virtualization. the IDC report showed that virtual machine and cloud system software grew 17.8 percent in the first half of this year.

“Virtual machine software unit shipments still remain healthy and growing, but have seen some slowdown in mature markets that have high virtualization rates,” said Gary Chen, IDC analyst.

He added that business models are also shifting with the hypervisor drawing less direct revenue and increasingly becoming an embedded feature of operating systems and cloud system software. Other virtualization-related technologies, such as the Workload Scheduling and Automation market, are following the same high-growth patterns as the core technology segments.

Other factors impacting the virtualization market include tough competition for VMware from vendors such as Red Hat and Microsoft. At the same time, IDC also noted a rise of open-source cloud software such as OpenStack, which make the market even more competitive.

Despite some increase in these software categories, IDC believes that 2012 turned out to be a more conservative growth period with gains in the single digits, slightly down from the growth experienced in 2010 and 2011.