IDC Asia/Pacific Semiannual Software Tracker Results Released

IDC Expects the Asia/Pacific Infrastructure Management Software Market to Improve in 2010 as the Economic Crisis Bottoms Out

Singapore and Hong Kong, July 3, 2009 -- The IDC Asia/Pacific Semiannual Software Tracker results for 2H2008 have revealed that the global economic crisis has blunted the double-digit growth rates the infrastructure management (IM) software market had been experiencing in the periods leading up to 2008. Defined here as consisting of the system and network management software and storage software, the IM software market has however, managed to continue to grow. IDC estimated the size of the market to reach US$1.5 billion[1], at a year-on-year growth rate of 7.6% for 2008 in the Asia/Pacific (excluding Japan) region[2].

Daphne Chung, Senior Research Manager of IDC’s Asia/Pacific System Infrastructure Software and Middleware Software Research, commented, “The crisis has created a much more cautious IT spending environment where businesses have become more cautious about each dollar spent on IM projects. Budgets are being scrutinized to ensure the best value is being obtained from vendors and money is being spent only on the most necessary and critical projects. As organizations cut costs and expansion plans are put on hold, the sales cycles for projects are also extending as companies seek to review the return on investments more carefully.”

While all sectors have experienced a significant slowdown in growth, the FSI sector was, as expected, one of the worst hit as the growth rate dropped from 18% to 11% compared to the previous year. The communications and media sector also suffered a single-digit decline in the growth rate during the same period.

“IDC expects the IM software market in the region to improve as the economic crisis bottoms out and confidence returns. Recovery in the APEJ region is expected to begin in 2010 as most users are likely to maintain spending in the market. Ultimately there are still pockets of opportunities available to vendors. The drive for cost savings and efficiencies while adapting to changing business needs fuels markets such as problem management and performance management software. Storage software has been less impacted by the financial crisis too, thanks to the growing data needs, compliance and regulation requirements. However, cost control, return on investment, and value-centric projects will remain in play, particularly for 2009,” added Daphne.

Figure 1 below provides a snapshot of the IM market outlook in the region and clearly India and the Greater China region, where the PRC sits, are expected to remain the bright sparks leading growth in the APEJ region. While infrastructure build-out in these countries has slowed, the countries continue to experience better growth compared to others in the region. When growth picks up pace once again, these markets are expected to steam ahead.

Figure 1. Asia/Pacific (Excluding Japan) Infrastructure Management Software Market Opportunities
Source: IDC Asia/Pacific Semiannual Software Tracker, May 2009
Note: Bubble size represents IM software revenue in 2008

[1] Software revenue includes license, maintenance and other software revenue such as subscription revenue
[2] APEJ refers to 10 Asia/Pacific countries: Australia, Hong Kong, India, Korea, Malaysia, New Zealand, the PRC, Singapore, Taiwan, and Thailand

Source: IDC