Gartner Says Worldwide Application Development and Project and Portfolio Management Market Increased 7 Percent in 2006

Gartner Analysts to Examine the State of the Industry at Upcoming Gartner Application Architecture, Development and Integration Summit, June 11-13 in Nashville

STAMFORD, Conn., May 29, 2007 — Worldwide application development (AD) and project and portfolio management (PPM) total software revenue reached $7.2 billion in 2006, a 7.2 percent increase over 2005 revenue, according to Gartner, Inc.

“Across both PPM and AD, the convergence of requirements management, testing, software change and configuration management (SCCM) and PPM tools resulted in shifting of revenue among these classes and the emergence of suites and integrated offerings across a number of subsegments,” said Laurie Wurster, research director at Gartner.

“The traditional AD market grew 2 percent year-over-year and was driven by above-average growth of emerging strongholds in submarkets, such as SCCM, distributed testing tools and security vulnerability scanners,” Ms. Wurster said. “The PPM market increased 20 percent in 2006 and is expected to grow at an above-average rate through 2011 as IT budgets remain tight and management struggles to do more with less. Applications for PPM boost team performance, and enable access to real-time data via dashboards for prioritization and quick decision making.”

In 2006, the top five vendors accounted for 64 percent of the total worldwide AD and PPM market (see Table 1). IBM maintained a commanding lead in the market, with 25.2 percent market share in 2006. While IBM is the clear market share leader in AD software, Microsoft’s continued strength in the PPM market helped solidify its spot as the No. 2 AD & PPM software vendor worldwide. All the top-tier vendors, except HP, saw sluggish software revenue growth from 2005 to 2006. Only HP outpaced the overall market growth at 17.7 percent because of the acquired Mercury product set.

Table 1
Worldwide 2006 Vendor Revenue Estimates for AD and PPM Software, Based on Total Software Revenue (Millions of Dollars)

Company	2006	2006 Market Share (%)	2005	2005 Market Share (%)	2005-2006 Growth (%)
IBM	1,806.7	25.2	1,773.9	26.6	1.8
Microsoft	774.1	10.8	725.4	10.9	6.7
CA	757.1	10.6	742.3	11.1	2.0
HP (Mercury)	681.7	9.5	579.2	8.7	17.7
Compuware	550.0	7.7	562.4	8.4	-2.2
Other Vendors	2,591.4	36.2	2,297.7	34.4	12.9
Total	7,161.0	100.0	6,680.9	100.0	7.2

Source: Gartner Dataquest (May 2007)

Gartner Dataquest’s software research group has traditionally measured market share in terms of new license revenue. However, because of the emergence and increasing popularity of open-source software and buyer consumption models, such as hosted and subscription offerings, Gartner has moved to measure market share in terms of total software revenue, which includes revenue generated from new license, updates, subscriptions and hosting, technical support and maintenance. Professional services and hardware revenue are not included in total software revenue.

Additional information is available in the Gartner report “Market Share: Application Development and Project and Portfolio Management Software, Worldwide, 2006.” The report provides market share results for the AD and PPM markets in seven worldwide regions. The report is available on the Gartner Web site at www.gartner.com/DisplayDocument?ref=g_search&id=506414&subref=simplesearch.

Gartner analysts will provide more detailed analysis on the future of applications at the upcoming Gartner Application Architecture, Development and Integration Summit 2007 taking place June 11-13 at the Gaylord Opryland Resort & Convention Center in Nashville, Tennessee.

The Application Architecture, Development and Integration (AADI) Summit is designed to help enterprises prepare for the challenges of the changing nature of software infrastructure and what it means for development, integration, Web services and architecture initiatives. Additional information is available at www.gartner.com/us/aadi.

Co-located with the AADI Summit is the Gartner Enterprise Architecture Summit taking place June 13-15. This summit is designed to help enterprises prepare for the most-pressing issues that enterprise architects face today, including how to align IT with business priorities, the new and emerging roles in the architected enterprise, measuring and justifying the value of EA and how to use business, information and technology architectures to deliver real capabilities to the business. Additional agenda and special “combo” pricing information is available at www.gartner.com/us/ea.

Members of the media can register for both events by e-mailing christy.pettey@gartner.com.

 

Contact:


Christy Pettey
Gartner
+1 408 468 8312
christy.pettey@gartner.com


About Gartner:
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.