MARKET SHARE Worldwide Datacenter Automation Software Market Shares, 2014: Year of Cloud and DevOps Mary Johnston Turner IDC MARKET SHARE FIGURE FIGURE 1 Worldwide Datacenter Automation Software 2014 Share Snapshot Note: 2014 Share (%), Growth (%), and Revenue ($M) Source: IDC, 2015 June 2015, IDC #256957
EXECUTIVE SUMMARY In 2014, the worldwide datacenter automation software market grew 12.0% to total just under $2 billion when calculated in current U.S. dollars. VMware retained the top market share ranking, with 24.2% on revenue of $481.2 million. The Americas region represented 62.9% of the total market. Datacenter automation vendors with strength in automated cloud, DevOps, and virtualization provisioning and orchestration led the market in terms of growth, while traditional vendors with strength in physical systems management automation lost share as demand for legacy products slowed. Customers continued to show interest in cloud self-service portals, brokers, and full-stack service provisioning/migration solutions but focused the bulk of new spending on automation of virtual, software defined, and cloud infrastructure operations including configuration automation, workload and infrastructure provisioning, migration, and orchestration for production IT and DevOps. On-premise solutions continue to dominate the market but began to encounter competition from cloudbased services, including free workload provisioning and orchestration functions provided as part of core public IaaS and PaaS cloud service offerings and/or as part of integrated platforms and softwaredefined infrastructure solutions. Customers are placing a priority on selecting solutions that support open standards and APIs to avoid vendor lock in. This IDC study discusses 2014 vendor shares and market activity across the worldwide datacenter automation competitive market. "Overall, the 2014 worldwide datacenter automation software market grew 12.0% because of increasing demand for automated provisioning, migration, and resource sharing across virtual, software-defined, cloud, and DevOps environments," explains Mary Johnston Turner, IDC research vice president, Enterprise Systems Management Software. ADVICE FOR TECHNOLOGY SUPPLIERS In 2014, most of the fastest-growing datacenter automation vendors found success by addressing the needs of highly virtualized and software-defined datacenters and servicing the needs of private and hybrid cloud environments as well as DevOps teams. Customers continue to adopt open source based solutions such as Puppet and Chef and are showing increasing interest in OpenStack. Vendors such as VMware, Cisco, Microsoft, Puppet Labs, Chef, and a number of start-ups that serve the needs of virtual and cloud datacenters, as well as DevOps teams, are finding opportunities for growth but are also beginning to see pressure from nontraditional competitors and substitute solutions. Many enhanced provisioning, orchestration, and self-service solutions are bundled and made available for free or very little cost as part of a new generation of integrated and converged hardware platforms, software-defined infrastructure, open source solutions, and public cloud IaaS and PaaS. Service management orchestration platforms such as those provided by ServiceNow are also beginning to make inroads against traditional market leaders. To maintain leadership and grow share in this market, vendors need to recognize the rapid pace at which enterprise customers and service providers are moving to simplify, standardize, and streamline their datacenter automation processes and tools. Rather than purchase separate point solutions for physical and virtual resources and for application and infrastructure configuration, release, update, and migration, customers are seeking more unified automation and orchestration solutions that leverage 2015 IDC #256957 2
open standards and enable optimization of complex, full-stack services across a hybrid and heterogeneous range of platforms and services. When crafting product development and go-to-market strategies, vendors should consider the threats and opportunities posed by the following trends: DevOps and big data have increasing impact on self-service provisioning and datacenter automation requirements. DevOps teams rely heavily on automation and orchestration solutions to support continuous delivery and updates of modern applications. Automated selfservice provisioning of development and test infrastructure continues to be an important private and hybrid cloud use case. Increasingly, application release tools are converging with traditional operations orchestration and provisioning solutions to enable DevOps teams to support the full life cycle of their requirements from a common platform and workflow model. Increasing role played by open source in providing common automation platforms and APIs that simplify and standardize many core datacenter automation activities and allow customers to more easily integrate workflows and deploy common services across heterogeneous infrastructure and services. Use of free open source software is gaining in popularity, among technically savvy service providers and enterprises with strong internal IT skills. Vendorsupported open source is also gaining interest among enterprise-class organizations that require certified and supported editions. Continued growth in demand for robust hybrid cloud management and automation solutions that allow for consistent provisioning, migration, and update of full-stack services across onpremise and hosted private clouds as well as public cloud resources. Rising availability of alternative solutions that are, in many cases, offered as free hardware or cloud service differentiators. Public cloud services vendors such as Amazon Web Services are aggressively expanding their portfolio of free and paid provisioning and orchestration services, while infrastructure vendors are integrating more and more advanced automation and orchestration software as part of core software-defined datacenter and integrated platform solutions. Start-ups and innovators continue to take share from slower moving incumbents either by offering compelling solutions for new requirements or by partnering aggressively to take advantage of increasing interest in hybrid cloud, DevOps, and open source. MARKET SHARE As shown in Table 1, the worldwide datacenter automation software market totaled just under $2.0 billion in 2014, which represented a 12.0% increase over 2013. The top vendors by market share were VMware, IBM, BMC, and HP. However, among the market share leaders only VMware delivered double-digit growth of 13.3% on revenue totaling an estimated at $481.2 million. VMware benefited from increasing interest in vrealize Automation, automated virtual server and virtual client management solutions, and ongoing demand for vcenter Site Recovery Manager. IBM, BMC, and HP saw low-single-digit growth on portfolios anchored by mature orchestration and server provisioning solutions and supplemented by some growth in cloud automation and orchestration offerings. 2015 IDC #256957 3
TABLE 1 Worldwide Datacenter Automation Software Revenue by Vendor, 2012 2014 ($M) 2012 2013 2014 2014 Share (%) 2013 2014 Growth (%) VMware 256.3 424.6 481.2 24.2 13.3 IBM 218.9 244.0 254.6 12.8 4.3 BMC 236.1 215.1 219.1 11.0 1.9 HP 151.6 207.6 213.3 10.7 2.8 Cisco 98.4 128.9 171.1 8.6 32.8 Microsoft 43.6 71.5 83.3 4.2 16.5 Egenera 55.6 58.9 67.7 3.4 14.9 Puppet Labs 10.4 20.0 38.5 1.9 92.5 CA Technologies 44.5 40.1 28.1 1.4-29.9 RightScale 49.3 50.4 34.5 1.7-31.5 Dell 27.4 28.2 33.0 1.7 17.2 Chef 6.0 15.9 25.1 1.3 57.4 ServiceNow 1.2 9.0 25.0 1.3 178.6 Micro Focus 18.0 22.5 24.9 1.3 11.0 Adaptive Computing 19.1 22.9 24.8 1.2 8.4 Parallels 15.1 15.9 21.0 1.1 32.1 Oracle 7.5 14.8 18.6 0.9 25.6 Symantec 20.4 19.1 16.9 0.9-11.3 Automic 12.3 13.0 19.9 1.0 53.0 CSC 25.5 27.5 14.0 0.7-49.1 NEC 7.3 7.7 13.3 0.7 73.1 Citrix 4.4 7.1 10.2 0.5 44.1 Fujitsu 7.2 8.0 9.8 0.5 22.5 2015 IDC #256957 4
TABLE 1 Worldwide Datacenter Automation Software Revenue by Vendor, 2012 2014 ($M) 2012 2013 2014 2014 Share (%) 2013 2014 Growth (%) Red Hat 9.3 3.8 8.4 0.4 122.5 ASG Software Solutions 7.1 6.4 8.8 0.4 36.8 CliQr 0.0 3.0 5.0 0.3 66.7 Hitachi 2.9 3.7 4.3 0.2 16.2 EMC 3.0 2.9 3.1 0.2 7.9 NKIA 1.4 1.6 2.3 0.1 39.4 Subtotal 1,359.7 1,693.9 1,879.8 94.6 11.0 Other 83.0 80.6 108.1 5.4 34.1 Total 1,442.7 1,774.5 1,987.9 100.0 12.0 Source: IDC, June 2015 WHO SHAPED THE YEAR VMware led the market in terms of share, while smaller players such as Cisco, Microsoft, Puppet Labs, Chef, and ServiceNow beat the market in terms of overall growth from smaller revenue bases. Collectively, these vendors championed the shift to more integrated hybrid cloud automation solutions and use of open source. Specifically: VMware saw market share increase to 24.2% as revenue growth of 13.3% drove revenue to total $481.2 million. The company has aggressively promoted and invested in automation solutions to support software-defined datacenter and cloud environments as well as continued improvements in the automation of virtual machine provisioning, migration, and site recovery. Cisco experienced increasing demand for a range of cloud and datacenter automation solutions and saw its market share increase to 8.6% on a 32.8% revenue increase, resulting in total estimated revenue of $171.1 million. Cisco benefited from increasing attach rates of datacenter automation solutions sold in association with UCS systems and/or InterCloud solutions. Microsoft captured 4.2% market share on $83.3 million in revenue due in large part to rising demand for automation and orchestration solutions support Hyper-V-based private clouds and integrations with Azure. Microsoft spent much of 2014 laying the groundwork for the recently introduced Azure Stack and Operations Management Suite, which were announced at 2015 IDC #256957 5
Microsoft's May 2015 Ignite customer event. This recently introduced solutions feature enhanced automation and orchestration functionality that should support continued Microsoft growth in this market in the coming year. Puppet Labs experienced a 92.5% increase in software revenue to total $38.5 million. Use of open source and commercially supported Puppet software continues to increase rapidly across a wide range of enterprise and service provider use cases. Chef saw a 57.4% increase in software revenue to total $25.1 million and a 1.3% share. Chef is also benefiting from rising interest in open source and commercially supported configuration automation solutions across a broad set of use cases and industries. ServiceNow took aim on the datacenter automation software market as part of an aggressive push to become a dominant enterprise service management orchestration platform provider and to build interest in SaaS-based automation and orchestration alternatives. ServiceNow revenue increased 178.6% to total $25 million, representing a 1.3% market share. MARKET CONTEXT In 2014, the market continued to see strong growth in the Americas region as enterprise-class organizations invested in datacenter automation to support cloud and DevOps initiatives. Economic headwinds slowed growth somewhat in EMEA and APJ. The Americas region represents 62.9% of total market revenue (see Figure 2). Figure 3 illustrates worldwide allocation of revenue based on operating environment in 2014. Windows represented the largest share with 53.6%, while 29.6% of implementations relied on Linux. FIGURE 2 Worldwide Datacenter Automation Software Revenue Share by Region, 2014 Source: IDC, June 2015 2015 IDC #256957 6
FIGURE 3 Worldwide Datacenter Automation Software Revenue Share by Operating Environment, 2014 Source: IDC, June 2015 Significant Market Developments Overall, the worldwide datacenter automation software market saw demand for hybrid cloud, and virtual datacenter automation continues to increase. IT teams continue to embrace advanced datacenter automation and orchestration solutions in order to support large-scale virtualized environments and cloud infrastructure as well as to improve IT operations efficiency and staff productivity. DevOps teams continue to extend use of self-service automation and orchestration solutions to support continuous delivery and updates of modern applications. Increasingly, application release tools are converging with traditional operations orchestration and provisioning solutions to enable DevOps teams to support the full life cycle of their requirements from a common platform and workflow model. In 2014, currency and geopolitical conflicts contributed to a very uneven distribution of revenue growth around the world. Growth rates were also somewhat slowed by the increasing availability and adoption of alternative datacenter automation and orchestration solutions, including embedded software sold as part of integrated platforms or offered free of charge as part of public cloud services. Open source solutions began to impact sales of commercially licensed software, particularly among service providers that have sufficient internal development and technical talent to customize and support open source automation and orchestration solutions. Some of the market's fastest-growing start-ups are targeting the commercialization of open source. METHODOLOGY The IDC software market sizing and forecasts are presented in terms of commercial software revenue. IDC uses the term commercial software to distinguish commercially available software from custom software. Commercial software is programs or code sets of any type commercially available through 2015 IDC #256957 7
sale, lease, rental, or as a service. Commercial software revenue typically includes fees for initial and continued right-to-use commercial software licenses. These fees may include, as part of the license contract, access to product support and/or other services that are inseparable from the right-to-use license fee structure, or this support may be priced separately. Upgrades may be included in the continuing right of use or may be priced separately. All of these are counted by IDC as commercial software revenue. Commercial software revenue excludes service revenue derived from training, consulting, and systems integration that is separate (or unbundled) from the right-to-use license but does include the implicit value of software included in a service that offers software functionality by a different pricing scheme. It is the total commercial software revenue that is further allocated to markets, geographic areas, and operating environments. The worldwide software market includes all commercial software revenue across all functional markets or market aggregations. For further details, see IDC's Software Taxonomy, 2014 (IDC #249238, June 2014). Bottom-up/company-level data collection for calendar year 2014 began in January 2015, with in-depth vendor surveys and analysis to develop detailed 2014 company models by market, geographic region, and operating environment. Note: All numbers in this document may not be exact due to rounding. MARKET DEFINITION The datacenter automation software market is a competitive submarket of IDC's workload scheduling and automation software functional market as described in IDC's Software Taxonomy, 2014 (IDC #249238, June 2014). Datacenter Automation Submarket Definition Datacenter automation includes software running on distributed, non mainframe platforms that enable dynamic automated physical and virtual server provisioning, container provisioning and orchestration, workload and VM allocation and reclamation, self-serve cloud provisioning portals, runbook automation, and workflow orchestration products. Task-level automation capabilities included in software that is primarily focused on asset discovery, software license management, and software distribution are not included here because they are part of the change and configuration management software market. Task-level automation capabilities included in software that is primarily focused on service desk operations are not included here because they are part of the problem management software market. The following are representative vendors and products in this market: BMC BladeLogic Server Automation and BMC Cloud Lifecycle Management IBM Tivoli Provisioning Manager and IBM Cloud Orchestrator HP Operations Orchestration, HP Server Automation, and HP Cloud Service Automation VMware vrealize Automation and VMware vrealize Orchestrator 2015 IDC #256957 8
RELATED RESEARCH IDC's Forecast Scenario Assumptions for the ICT Markets and Historical Market Values and Exchange Rates, Version 2, 2015 (IDC #256665, June 2015) Worldwide Workload Scheduling and Automation Software Market Shares, 2014: Year of Cloud Versus Currency (IDC #256284, May 2015) Worldwide Workload Scheduling and Automation Software 2015 2019 Forecast: Datacenter Automation Drives Growth While Workload Management Carries On (IDC #254762, March 2015) IDC's Software Taxonomy, 2014 (IDC #249238, June 2014) Worldwide Datacenter Automation Software 2013 Vendor Shares (IDC #248783, May 2014) 2015 IDC #256957 9
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