Enterprise Software Sales Grew 8.5 Percent in 2010

Stuart J.

Updated · May 06, 2011

The enterprise software market grew by a surprising 8.5 percent worldwide in 2010, at least partly based on strong sales in Latin America and Asia/Pacific markets, according to a new report.

Total revenue for enterprise software hit $245 billion last year, according to a report by analyst firm Gartner released today. An 8.5 percent growth rate is a far cry from 2009, when the industry overall shrank 2.5 percent to only $226 billion.

Microsoft (NASDAQ: MSFT) led the list of top performers with a total of some 22.4 percent market share that yielded $57.4 billion in enterprise sales.

Coming in second, IBM (NYSE: IBM) pulled down a 10.4 percent share and brought in $25.4 billion, a statement accompanying Gartner’s report said.

However, Gartner noted that accounting for the two companies’ share and revenues were driven by different sales models.

“[Microsoft’s] growth results were enhanced in 2010 by the broader adoption of new releases of the Windows 7 operating system and Microsoft Office 2010 productivity software,” the statement said.

In fact, IBM would be the top vendor if Gartner did not count consumer sales of Microsoft’s office and operating systems, because IBM sells only to enterprises and partners.

However, Big Blue may yet find its second place ranking at risk, as Oracle (NASDAQ: ORCL) made the sharpest gains for the year for the top five. It grew from an 8.9 percent share in 2009 to 9.8 percent in 2010 on $23.9 billion in enterprise sales.

At the same time, IBM’s share slightly declined from 10.7 percent in 2009.

“[Oracle’s] growth was achieved across all software markets, with faster growth emerging from its business intelligence, security, IT operations, and data integration and quality tools offerings,” the statement added.

Oracle, Gartner said, made some of those gains because it kept many of the technologies it has acquired intact while integrating the infrastructure and middleware into Oracle Fusion Middleware 11g.

Coming in behind Oracle is staunch rival SAP (NYSE: SAP), with 5.3 percent share and $13 billion in enterprise sales. Rounding out the top five was Symantec with 2.3 percent and $5.7 billion.

However, the story is much larger than merely the top five players.

Indeed, “other vendors” still controlled 49.8 percent market share overall, for a whopping total of $122 billion in sales worldwide, but while the “others” category grew in dollar volume, it shrank slightly from 51.3 percent in 2009, the report said.

Leaders in the others category included VMware (NYSE: VMW), Adobe (NASDAQ: MDBE), and Salesforce.com (NYSE: CRM), the fastest-growing of the top 25 vendors.

Stuart J. Johnston is a contributing editor at InternetNews.com, the news service of Internet.com, the network for technology professionals. Follow him on Twitter @stuartj1000.

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