Software Market Forecasted to Slow Considerably in 2012

By Douglas Perry
published

Europe's economic troubles are expected to result in much slower growth for the global software industry this year.

In Europe itself, software makers will post, on average, slight or no growth in 2012, IDC said.

According to the market research firm, the fastest growing software markets in 2011 were enterprise social software, virtual machine software, and team collaborative applications. The fastest growing developer software segment was the relational database management systems (RDBMS) market. Asia/Pacific and Japan showed strong regional growth and now represent 16.5 percent of all software sales globally. America still dominates with a 53 percent share and was supported by strong gains in Latin America last year.

"2011 delivered nearly double-digit growth in the worldwide software market, the highest annual growth rate in the years since the 2008 financial crisis," said Patrick Melgarejo, an analyst with IDC. "However, IDC expects the overall software market to return to more conservative growth in the years to come. The major driver behind this decelerating growth is the forecast for close to flat performance in EMEA, due to the economic difficulties in that region."

Among software companies, Microsoft remained the largest software vendor worldwide, raking in 17.8 percent of all sales, which was more than twice the share of IBM, which came in second. Oracle and SAP were placed third and fourth. 35 of 1,164 monitored software companies reported revenues of more than $1 billion. Those 35 companies accounted for 62 percent of the software market, while 1,129 vendors and smaller "others" shared the remaining 38 percent. However, only three billion dollar companies - VMware, Salesforce.com, and Cadence Design Systems - were able to achieve more than 20 percent revenue growth in 2011, IDC said.

11 Comments Comment from the forums
  • DroKing
    greghomeOr..or maybe.........consumers are already satisfied with what they've already got.This is the problem with our economy, the manufacturers, corporations, CEOs, expect us to replace something we already have that works perfectly with something that cost more or just as much, but doesn't perform considerably any better every year.
    THIS! The newer software and such doesn't even fully utilize our powerful computer hardware which is a different subject ^_^.
    Reply
  • aftcomet
    Or more people are learning how to pirate.
    Reply
  • A Bad Day
    DroKingTHIS! The newer software and such doesn't even fully utilize our powerful computer hardware which is a different subject ^_^.
    "Hey gamers! Here's this new awesome game! But it only supports two cores..."
    Reply
  • alidan
    A Bad Day"Hey gamers! Here's this new awesome game! But it only supports two cores..."
    or a program that only uses one core
    or a program that bloats itself into running worse
    or a program goes for a cellphone look
    or a program goes from simple to needlessly complex
    or a program that clearly could use gpu acceleration, still isnt implementing it for some stupid reason, and gives nothing but a facelift change.
    Reply
  • Shin-san
    That bites. The market was really hot in the Spring
    Reply
  • blazorthon
    Software companies would have a lot more luck at selling products if they consistently and periodically made things worth buying. Heck, I could just use Windows XP x86 if I didn't want to use my 16GB of RAM for my work and considering that it's a ten or eleven year old OS that is almost free (even legally) by now, that's saying something. That new OSs that support more than ~4GB of RAM without workarounds and still have proper driver support (XP x64 has given me problems before), yet are so bloated that it's almost not even worth doing tells me that MS really doesn't want my money, they just want to whine about not having it. Other software these days can also get very bloated and can have many other problems, but this is a prime example IMO.
    Reply
  • Zingam_Duo
    Everybody is so mind blinded by "growth" that nobody questions how could something grow indefinitely in a finite system like ours???

    How much can an industry grow? Every man should by 1000 cars, 5000 laptops, etc... wait... but they are trying to lower the wages all the time to maximize profit... so instead of buying more than before people actually would be able to buy less, so how could that type of economy work, it is beyond the capacity of my simple brain.
    Is there a genius economist who would like to explain it to me? Or maybe economics and finances beyond simple exchange of goods: "I am giving you a cup of rice and you are giving me a cup of beans back" is nothing but an elaborate scam, eh?
    Reply
  • Great prediction to make when 2012 is already halfway over.
    Reply
  • meltbox360
    zingam_duoEverybody is so mind blinded by "growth" that nobody questions how could something grow indefinitely in a finite system like ours???How much can an industry grow? Every man should by 1000 cars, 5000 laptops, etc... wait... but they are trying to lower the wages all the time to maximize profit... so instead of buying more than before people actually would be able to buy less, so how could that type of economy work, it is beyond the capacity of my simple brain.Is there a genius economist who would like to explain it to me? Or maybe economics and finances beyond simple exchange of goods: "I am giving you a cup of rice and you are giving me a cup of beans back" is nothing but an elaborate scam, eh?
    Capitalism relies on boom/bust. Unfortunately idiots who control the money thought they could fix it and brought in imaginary money in the form of speculative investments. While this enables increased growth it also promotes HUGE busts that end in catastrophic economic failure! The only way to sustain indefinite growth is if investors all agree that everything is going up in value. The everyone will simply become richer because people think they are richer. Really dumb system but I don't have an alternative to propose so...
    Reply
  • aeurix
    Zingam_Duowait... but they are trying to lower the wages all the time to maximize profit...
    I feel like your initial assertion is incorrect. Few companies "lower wages" unless they are about to go under and all the employees agree to it. What they may do is maximize the efficiency of a process so only one person needs to push a button instead of the two before-- or in the case of this article, using self generating code (c# has a lot of this). Capitalism is the only system (that I've ever read of) where the smartest minds are working for the general populace, to earn their money.

    Your straw man argument that every man should buy 1000 cars is irrational at best... car technology will get better and better, and if someone wants to create efficiency for society and profit from it, they should be able to buy whatever they want with their earned value (a.k.a. Money). Growth is only limited by the size of the universe.
    Reply