IDC: Virtualization software growth outpaces other software market segments

Microsoft, Red Hat challenge virtualization market leader VMware

Virtual machine and cloud system software was the fastest growing segment among software markets, posting a 17.8 percent growth rate in the first half of 2012 compared with the same time period last year, according to the latest data from IDC.

Image source: IDC

The virtual client computing market segment maintained the low double-digit growth rate it has experienced over the past three years, while other virtualization-related technologies, such as the workload scheduling and automation segment, are experiencing the same high-growth patterns as the core technology segments, IDC data indicated.

"Competition in the [virtualization] market is fiercer than ever, with vendors like Microsoft (Nasdaq: MSFT) and Red Hat challenging market leader VMware (NYSE: VMW) with increasingly capable and cheaper solutions," said Gary Chen, research manager for cloud and virtualization system software at IDC.

"Cloud system software, which includes platforms such as vCloud, OpenStack, and CloudStack, remains a nascent market, but holds a lot of promise as customers evolve from virtualized infrastructure to cloud infrastructure. On the client side, virtual client computing remains on a steady growth path as the industry matures its solutions and customers begin to transform their desktops and workspaces," Chen observed.

Overall, the worldwide software market grew 4.7 percent in the first half of 2012 compared to the same period in 2011, reaching a market size of $167 million. IDC said it expects this year to inaugurate a more conservative growth period for the software market as a whole.

Other fast growing enterprise software segments include customer relationship management (CRM) applications and collaborative applications.

Three of the four CRM application subsegments--customer service, marketing and sales--posted a combined 12 percent growth rate in the first half of 2012, while the call center subsegment lagged behind with single digit growth.

"The move to interact with customers when, where, and how they want is changing the go-to-market strategies of many organizations. Technology is now a requirement to be able to deliver consistency at scale," said Mary Wardley, program vice president for CRM applications and customer experience at IDC.

Within the collaborative applications segment, team collaborative applications and enterprise social software have experienced strong growth over the past two year, according to IDC. The enterprise social software subsegment has moved from a 3 percent market share within the collaborative applications segment in 2008 to 11 percent in the first half of this year, while the team collaborative applications subsegment grew almost 15 percent during the first half of 2012.

"Increasingly, companies are thinking of social solutions as decision support and ad hoc work facilitators and are looking for richer features that integrate data and content with people and systems," commented Vanessa Thompson, research manager for enterprise social networks and collaborative technologies.

Enterprise software sales are continuing to grow at a strong pace, fueled by the increasing complexity of enterprise IT, the expanded employee use of social media, the BYOD trend and the explosion of data. Opportunities abound for the software vendors plugged in to the needs of this market.

For more:
- check out IDC's data

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