IDC: Strong Growth for Global Software Market

The packaged software market will continue to grow at a compound growth rate of 15 per cent through 2004, a new study concludes.

One of the major catalysts for the continued growth is the Internet, said one author of the International Data Corp. (IDC) study.

"I think that the Internet has demonstrated to everyone the value of computers," said Steve Hendrick, IDC's vice president of application development and deployment research. "Not only are people attuned to what computers can do for us, but companies and people are looking for higher levels of automation for (capabilities) of what they can do. Computers can be very powerful assets. I think that kind of perspective will help fuel greater demand."

The IDC study, "Worldwide Software Market Forecast Summary, 2000-2004," found that, while application development and deployment software possesses the smallest segment of the market, it will grow at the most rapid rate. Its revenues will increase from $US36.5 billion in 1999 to $US90.2 billion in 2004. Hendrick suggests this market will grow as business initiatives are turned into Web strategies.

The applications software segment, which is the largest and most fragmented, is expected to grow at the slowest pace. IDC forecasts that it will have a 12 per cent compound annual growth rate through 2004. The study, however, suggests the number hides the 30 per cent growth anticipated in submarkets such as customer relationship management (CRM), product information management, content and document management and business performance management.

Revenue growth, overall, in the packaged software market will hit about 15 per cent in North America, Western Europe, Asia/Pacific and the rest of the world, the study finds. North America's packaged software market will edge slightly ahead at a 15.5 per cent growth rate and account for more than half of the market's overall sales. What this translates into in actual revenues was not immediately available.

IDC predicts strong growth with the Linux operating system. In the Linux applications development and deployment market, the forecast is for a 183 per cent growth rate. Linux, however, will continue to lag behind Microsoft Corp.'s 32-bit Windows operating system development revenues.

IDC is a subsidiary of International Data Group Inc., the parent company of IDG News Service.

IDC Corp., in Framingham, Massachusetts, can be reached at http://www.idc.com/.

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