PPM vendors expanding their reach into additional domains
The worldwide project and portfolio management (PPM) software revenue totalled $1.65 billion in 2012, up 11 percent from $1.48 billion in 2011, according to final results from Gartner, Inc.
“In 2012, the PPM software market had strong growth for the third consecutive year despite, or perhaps because of, slow economic growth, tight IT budgets, and merger and acquisition activity,” said Laurie Wurster, research director at Gartner. “Turbulent or uncertain IT requirements perpetuated by a stagnant economy are driving changes in IT solutions and delivery models. Key vendors continue to expand product portfolios, buy companies where appropriate, and expand their reach into emerging markets. 2012 represented continued resiliency, where the total PPM market expanded in terms of both revenue dollars and worldwide markets.”
Vendor movement has been characterized by partnering and acquisition, some new sales emphasis beyond North America, and improved packaging and delivery options (most notably, software as a service [SaaS]), as well as by new product releases. Through 2011, PPM product development was generally focused more on integration. However, in 2012, it showed signs of resiliency and innovation as some vendors transformed themselves to support changing user requirements and expanded their reach into additional PPM domains (such as PPM for professional services), or into domains outside PPM (such as greater reach with SaaS offerings and into technologies such as application life cycle management [ALM]).
The top five PPM vendors accounted for nearly 50 percent of PPM software revenue in 2012, and there was no change in their ranking. Oracle maintained its top position, with revenues of $381 million, as the company moved to broaden its PPM “sweet spot” into the midmarket with the November 2012 acquisition of cloud-based Instantis. Second-placed Microsoft also grew revenues by 10 percent to reach $252 million, while, in third place, CA Technologies grew revenue by seven percent to reach $157 billion.
The market for PPM software at the regional level remains, as in previous years, with North America and Western Europe the prime consumers. Nearly 90 percent of this revenue is concentrated in developed markets, suggesting that, on the IT adoption curve, PPM is a relatively late technology to adopt and is targeted by relatively mature companies.
Nonetheless, not all regions experienced the high-double-digit growth of Eastern Europe, Greater China, emerging Asia/Pacific, Latin America, and the Middle East and North Africa. The areas with slowest growth were Western Europe and North America, with 6.3 percent and 10 percent growth, respectively, but with a significantly larger revenue base; the amount of gain in revenue was substantially higher than in the faster-growing regions.
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