Gartner: Enterprise software spending rebounds 8.5%

Microsoft holds the top spot, assisted by the release of Windows 7 and Office 2010, as the industry shakes off the economic downturn

Global spending on enterprise software grew 8.5 percent in 2010 to $245 billion following a 2.5 percent drop-off in 2009, suggesting the industry is shaking off the effects of the economic downturn and starting more new projects, according to figures released by analyst firm Gartner on Thursday.

Some regions fared better than others, however, with Japan and Western Europe seeing a "relatively modest" uptick, while Asia-Pacific and Latin American countries had growth rates in the teens, or nearly twice the average, Gartner said.

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Microsoft stood at the top of the market-share pack, with 22.4 percent, assisted by the release of Windows 7 and Office 2010, according to Gartner. The company's increased focus on infrastructure software and application development tools helped as well, the report said.

IBM kept its second-place berth thanks in part to strong sales of WebSphere middleware and Tivoli system management tools, Gartner said. It also made new forays into applications for e-commerce, marketing, and sales, Gartner noted.

Big Blue would take the top spot if Microsoft's sales of Office and Windows to consumers were left out of the study, the firm added.

Oracle experienced the most growth of the top five enterprise software vendors, with revenue rising 19.4 percent. Growth was strongest in areas such BI (business intelligence) and security, Gartner said.

VMware led the top 25 companies with about 41 percent growth rate, according to Gartner. That figure was likely helped by the company's string of acquisitions last year, which included email and collaboration vendor Zimbra as well as security provider TriCipher.

Such consolidation shows no sign of ending "as vendors and service providers look to expand their customer bases, add unique features aligned to a vertical-market or technology function, and improve overall market presence," Gartner analyst Tom Eid said in a statement.

The rebound in enterprise software spending dovetailed with a rise in IT services revenue during 2010, according to another Gartner report this week.

IT services spending grew 3.1 percent to $793 billion last year, with IBM, Hewlett-Packard, and Fujitsu taking the top three market share berths. That compares with a 5.1 percent drop during 2009, according to Gartner.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's email address is Chris_Kanaracus@idg.com.

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