Gartner Reports Worldwide Application Development Software Market Grew 4.2 Per Cent in 2008

Top Three Vendors' Growth Outpaced Market Average

STAMFORD, CT, June 15, 2009 -- The worldwide market for application development (AD) software totalled $7.3 billion in 2008, a 4.2 per cent increase from 2007 revenue of $7 billion, according to Gartner, Inc. (NYSE: IT). Gartner said that the key drivers in the AD market were cost containment and cohesive offerings. Organisations had an increased focus on ensuring the overall quality of software, especially from a security perspective. In addition, organisations looked to exploit service-oriented architecture (SOA) in their new AD architecture developments and use software as a service (SaaS) and cloud computing for their existing AD advancements.

“In 2007, the annual growth rate was 11.2 per cent indicating that the worldwide economic crunch has clearly slowed growth in this market,” said Laurie Wurster, research director at Gartner. “However, single-digit growth in a challenging economic climate is good, especially in this relatively mature market overall, with some hot spots remaining within it. Investments are temporarily suspended and deferred but not cancelled. We expect the growth rate to increase from the third quarter of 2009.”

The Asia/Pacific region saw the greatest growth at 12.1 per cent, followed by Eastern Europe at 9.8 per cent and the Middle East and Africa at 7.9 per cent. By comparison, the AD market in Western Europe grew 6 per cent and North America 1.6 per cent in 2008. The fastest growing technology sectors in 2008 were construction software (development environments and suites) at 6.7 per cent, quality-testing tools at 5.5 per cent and security testing (dynamic application security testing – DAST- and static application security testing - SAST) tools at 39.2 per cent.

Fuelled by acquisitions of vendors in the fastest growing AD market segments, the top three vendors – IBM, Microsoft and HP - grew faster than the market average. HP experienced the strongest growth among the top three vendors with an increase of 17.6 per cent in 2008.

Table 1
Total Software Revenue for All Software Segment Types (Millions of US Dollars)

Source: Gartner (June 2009)

“For the remainder of 2009, vendors will pull out of some geographies and enter new ones and further high growth should come from Asia/Pacific markets as more offshoring is expected for cost containment measures,” concluded Ms Wurster. “In addition, alternate software delivery models will pick up and vendors will optimise on direct vs. channel sales. However, the bulk of business for advanced developments and advanced usage of AD tools will come from North America and some mature economies in Europe, the Middle East and Africa.”

Additional information is available in the Gartner report, “Market Share: Application Development Software, Worldwide, 2008".

Source: Gartner, Inc.