Competitive Analysis Worldwide Application Performance Management Software 2013 Vendor Shares Melinda-Carol Ballou Rohit Mehra Tim Grieser Mary Johnston Turner IDC OPINION The worldwide application performance management (APM) software market is a competitive market representing portions of several IDC functional markets including performance management, event management, network management, and automated software quality. The overall worldwide 2013 APM software market total was slightly lower than previously forecast as slow/negative growth in older legacy product revenue dragged down rapid growth by modern predictive APM analytics, SaaS offerings, and APM solutions optimized for mobile and hybrid cloud applications. IDC analysis of market activity during 2013 indicates: The worldwide APM software market increased 10.0% over 2012 for total estimated revenue in 2013 of $2.4 billion. The top 3 vendors in terms of revenue were IBM, which held 15.2% market share; CA Technologies with 13.6% share; and Compuware with 12.0% share. The vendors with the highest growth rates over 2012 revenue included Splunk (132%), AppDynamics (100%), and New Relic (79%). August 2014, IDC #250361
IN THIS STUDY This IDC study examines leading vendor shares and market trends in the worldwide APM software market during 2013. Vendor shares from 2011 are provided for historic context. The most recent worldwide forecast for this market will be published a forthcoming IDC document. Methodology The revenue estimates in this study are limited to commercial software license, maintenance, and SaaS revenue using the methodology detailed in IDC's Software Taxonomy, 2014 (IDC #249238, June 2014). In addition, please note the following: The information contained in this study was derived from IDC's Software Market Forecaster database as of May 9, 2014. All numbers in this document may not be exact due to rounding. For more information on IDC's software definitions and methodology, see IDC's Software Taxonomy, 2014 (IDC #249238, June 2014). Only solutions that qualify as commercial software using IDC's methodology are included in this analysis. Solutions that are primarily enabled via custom hardware platforms, ASICs, or professional services are excluded as they do not qualify as commercial software. Worldwide APM Software Taxonomy The term application performance management (APM) is being adopted by a wide range of application development, test, quality, and systems and network management packaged software and SaaS vendors. In general, vendors are embracing the term in an attempt to signal to customers that their monitoring, testing, and analytic solutions can provide value to the business and can enable visibility into application health and end-user experience. It is in effect an effort to distance their offerings from more traditional systems and network management tools that focused on monitoring the health and status of specific hardware or software components but did not provide an end-to-end user perspective or business context. In developing this document, IDC defines APM as a competitive software market representing segments of several functional markets as defined by IDC's Software Taxonomy, 2014 (IDC #249238, June 2014). Specifically, these are: Performance management Event management Network management Automated software quality APM software focuses on monitoring, maintaining, and optimizing the performance and health of business applications across development, test, datacenter, and network environments. Packaged 2014 IDC #250361 1
software and SaaS solutions marketed as end-user experience monitoring (EUEM), real user monitoring (RUM), and business transaction monitoring (BTM) are generally included in the APM market. Many APM solutions include some level of IT analytics and correlation as part of the feature set. To that extent, these analytics are core elements of the APM offering that are included in this market assessment. However, standalone or general-purpose IT operations analytics solutions are excluded. APM solutions are distinct from more traditional component or system-level monitoring and testing tools in that they are able to look across complex operational environments, discover hardware and software dependencies and topologies, and track transactions, packets, and code traces on an end-toend basis that provides business application impact assessments and context. Increasingly, APM solutions are incorporating advanced visualization and executive dashboards as well as predictive analytics and modeling capabilities to enable rapid and proactive detection, diagnosis, and remediation of application performance problems and incidents, whether the source is linked to code, systems, or network issues. Both agent-based and agentless approaches, including synthetic transaction monitoring, are included. Network management products included in this market must specifically report on application performance. Products that provide generic grouping's information based on protocols (i.e., HTTP, CIFS, IP) are excluded. Console-based event correlation engines and event filters as well as system infrastructure level event analytics, modeling, and reporting products are also excluded. Solutions that monitor cloud IaaS exclusively are excluded, although cloud-based APM services that monitor and report on application health, quality, and availability are included. Performance, stress, and load testing products and some static and dynamic code analytics products and code analysis capabilities leveraged in conjunction with relevant APM portfolios (and tracked in IDC's automated software quality market) are also included as they provide key capabilities for gaining visibility into how well applications are performing in conjunction with real user monitoring. They also provide the ability to discover and then remediate software problems. Functional and regression testing as well as typical test management do not play a role in APM. Performance and event management software products, application management, and network management products that focus exclusively on system- or code-level event monitoring, log management, system- or network-specific performance monitoring, reporting and analytics, and related management packs and plug-ins are excluded. Consistent with IDC's software taxonomy, this competitive market covers both packaged software license and maintenance revenue as well as SaaS-delivered solutions. Software elements of appliance-based solutions are also included. Examples include: Compuware APM (formerly Gomez and dynatrace) CA APM (formerly Wily) IBM SmartCloud Application Performance Management and IBM Service Engage Performance Management (portions thereof) 2014 IDC #250361 2
HP Application Performance Management and HP APM Advanced for SaaS BMC ProactiveNet and BMC End User Experience Monitor Keynote Perspective New Relic AppDynamics Riverbed SteelCentral AppInternals and Riverbed SteelCentral AppResponse Examples of excluded products include: IBM Netcool and NetView HP Network Node Manager HP Operations Manager Based on IDC's analysis, the worldwide APM software market in 2013 totaled $2.4 billion. This represents 10.0% growth from 2012 to 2013. This market assessment includes software deployed on mainframe and distributed platforms as well as SaaS-delivered APM services. Revenue estimates in this document are developed consistent with IDC's normal calendar year revenue recognition and currency conversion methodologies. SITUATION OVERVIEW Worldwide APM Software Market in 2013 In 2013, the worldwide APM software market increased an estimated 10.0% to a total of $2.4 billion (see Table 1). The top 5 vendors were IBM, CA Technologies, Compuware, HP, and Riverbed. They collectively controlled 55.2% of the market. 2014 IDC #250361 3
TABLE 1 Worldwide Application Performance Management Software Revenue by Vendor, 2011 2013 ($M) 2011 2012 2013 2013 Share (%) 2012 2013 Growth (%) IBM 318.8 357.1 369.0 15.2 3.3 CA Technologies 319.9 330.0 330.0 13.6 0.0 Compuware 227.0 272.0 291.0 12.0 7.0 HP 229.5 231.4 218.0 9.0-5.8 Riverbed 90.0 122.0 131.0 5.4 7.4 Microsoft 56.3 108.5 129.0 5.3 18.9 Keynote Systems Inc. 75.5 86.6 94.2 3.9 8.8 BMC 84.5 90.0 82.0 3.4-8.9 Dell 62.0 67.0 71.0 2.9 6.0 Splunk 17.0 25.0 58.0 2.4 132.0 New Relic 14.0 31.0 55.5 2.3 79.0 AppDynamics 9.0 26.5 53.0 2.2 100.0 Attachmate Group 41.4 43.0 45.0 1.8 4.7 Oracle 22.4 29.9 33.4 1.4 11.7 SOASTA 11.0 17.0 28.0 1.2 64.7 Subtotal 1,578.3 1,837.0 1,988.1 81.7 8.2 Other 352.4 374.5 445.0 18.3 18.8 Total 1,930.7 2,211.5 2,433.1 100.0 10.0 Source: IDC, August 2014 2014 IDC #250361 4
Share by Geographic Region The Americas continue drive the majority of APM software spending, with 58.6% of revenue in 2013. This is due in part to rising demand for APM solutions targeted at mobile applications and cloud-based applications, as well as long-standing use of APM among very large Fortune 500 organizations including financial services companies based in North America (see Figure 1). FIGURE 1 Worldwide Application Performance Management Software Revenue Share by Region, 2013 Source: IDC, August 2014 Share by Operating System APM solutions are deployed across a wide range of operating systems. IDC estimates that in 2013 Linux continued to take share from Unix, with Linux representing 14.4% of the market. Windows continued to represent the largest segment, with 45.7% of revenue, while mainframe represented 20.2%. Unix provided 16.6% of revenue, a significant reduction from the 19.9% it represented a year ago (see Figure 2). 2014 IDC #250361 5
FIGURE 2 Worldwide Application Performance Management Software Revenue Share by Operating Environment, 2013 Source: IDC, August 2014 FUTURE OUTLOOK Growth of the worldwide APM market slowed slightly in 2013 as legacy product sales dropped off faster than fast-growing but lower-cost products and SaaS offerings could backfill revenue. As this dynamic accelerates, vendors that are unable to rapidly transition product offerings will continue to see revenue flatten or shrink as they lose share to fast-growing start-ups and innovators. In 2014 and beyond, customers will demand solutions that provide rapid time to value, opportunities to "try" before they "buy," and simplified pricing schemes that allow them to ramp up investment as business needs dictate. Intuitive user interfaces and solutions that deliver value rapidly with minimal specialized staff training required will also be warranted. Demand for APM will benefit for increasing adoption of dev/ops continuous delivery methodologies that require developers and operations teams to share insight into real-time production load tests, the production performance impact of changes and updates, and the ability to evaluate end-user experience across a wide range of personas and end-user devices. The increasing availability of easy-to-deploy SaaS options is helping extend the addressable market by providing affordable rapid time to value to a broad range of emerging service provides and midsize organizations that might have found first-generation APM solutions to be too costly and cumbersome to deploy effectively. 2014 IDC #250361 6
ESSENTIAL GUIDANCE IDC expects the worldwide APM market will continue to see customer interest in a variety of delivery options, including continued strong interest in SaaS solutions. IDC expects many customers will continue to rely on multiple APM solutions depending on the nature of their applications environments, development skill sets, and network topologies. IT operations analytics solutions optimized for APM will be integrated with log files and data feeds provided by multiple tools. Customers will prioritize solutions that can effectively analyze and determine root cause across multiple data sets while enabling proactive, predictive analysis to reduce errors and avoid service outages across traditional, mobile, Web, and cloud applications using a common set of dashboards, GUIs, and analytics. Successful vendors will respond to these needs by continuing to streamline solutions, expand the range of environments supported, provide both SaaS and on-prem solutions, and enhance analytics and query tools. LEARN MORE Related Research Worldwide Network Management Software and Appliance 2014 2018 Forecast and 2013 Vendor Shares (IDC #250021, July 2014) IDC's Software Taxonomy, 2014 (IDC #249238, June 2014) Worldwide System Management Software as a Service 2013 Vendor Shares (IDC #248887 May 2014) Worldwide Performance and Availability Management Software 2013 Vendor Shares (IDC #248796, May 2014) Worldwide Distributed Performance and Availability 2013 Vendor Shares (IDC #248837, May 2014) Worldwide Cloud Testing and ASQ Software as a Service 2013-2017 Forecast and 2012 Vendor Shares: Driving Quality Adoption (IDC #245161, December 2013) IDC MarketScape: Worldwide Production APM Software as a Service 2013 Vendor Analysis (IDC #243716, October 2013) Worldwide Application Performance Management Software 2013 2017 Forecast: Cloud and Mobile Fuel Rising Demand (IDC #242875, September 2013) Worldwide Automated Software Quality 2013 2017 Forecast and 2012 Vendor Shares: Lower But Ongoing Growth Driven by Mobile, Cloud, and Complex Deployments (IDC #241927, June 2013) 2014 IDC #250361 7
Synopsis This IDC study examines the worldwide APM software market for 2011 2013. Revenue and market share of the leading vendors are provided for 2013. "Worldwide APM software revenue grew by 10.0% in 2014 to reach a total of $2.4 billion," according to Mary Johnston Turner, research VP, Enterprise System Management Software. She explains, "IBM, CA Technologies, Compuware, HP, and Riverbed have a combined worldwide market share of 55.2%, but their market leadership is under pressure from fast-growing new entrants such as Splunk, AppDynamics, and New Relic as well as increasing Microsoft capabilities in this area." 2014 IDC #250361 8
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