Worldwide application infrastructure and middleware (AIM) software revenue totalled $US23.9 billion in 2015, a 0.1 percent increase from 2014.
According to Gartner, the considerable appreciation of the US dollar in 2015 masked growth in the market and in constant currency terms the market grew 7.8 per cent, driven by rapid growth in the platform as a service (PaaS) segment.
“The PaaS segment showed the most impressive growth, not just in the AIM market but across the entire enterprise software market,” Gartner Research Director Fabrizio Biscotti said.
“Integration PaaS (iPaaS) grew 55 per cent in US dollars, while application PaaS [aPaaS] grew 40 per cent, despite headwinds from the appreciating US dollar.”
While older technology remains the first choice for the most demanding application scenarios, Biscotti said the evolving maturity of Cloud application infrastructure now offers "greater agility, scalability and efficiency" than traditional on-premises technologies.
For Biscotti, this ongoing transition to Cloud services and the emerging wave of innovation surrounding the Internet of Things (IoT) further pushes application infrastructure spending away from older models toward event-driven analysis and processes.
“Market concentration among the largest vendors is diminishing under pressure from specialists, and open source and cloud providers,” Biscotti added.
“The growth of iPaaS and aPaaS has, largely, not worked out to the benefit of the market incumbents.”
In 2015, the largest vendors retained their market positions, but market leader IBM suffered a revenue decline of nearly 13 per cent, falling to 25 per cent of the total AIM software market.
Meanwhile, Oracle's revenue also dropped, by nearly four percent, capturing 13 per cent of the total market.
In addition, Microsoft's five per cent revenue growth meant it was the only one of the top three players to grow its revenue with Salesforce retaining the fourth spot, while Software AG dropped out of the top five - switching places with TIBCO Software.
“Salesforce continues to disrupt the AIM market, with its revenue growing more than 36 percent to just over a billion dollars,” Biscotti added.
“Salesforce's strong performance, as well as steady growth in the ‘Others’ category, underlines the trend of Cloud-only firms and smaller specialists picking up market share at the expense of traditional vendors in this space.”
Biscotti said this trend is consistent with AIM buyers' pursuit of innovation - not necessarily from a technology perspective, but most of all from go-to-market, business model and delivery channel perspectives.
“2015 was the year that iPaaS became a serious alternative to traditional software-based integration approaches,” Gartner Research Director Keith Guttridge added.
“Buyers are choosing iPaaS due to its lower entry costs, reduced operational demands and improved productivity. Vendor interest in this space is also growing rapidly, with the number of offerings doubling in the past 12 months.”