If you buy into the IBM and Oracle PR that they are cloud “leaders” and are successfully transitioning their on-prem software businesses, think again.
Gartner’s latest assessment of the application infrastructure and middleware (AIM) market serves as a timely slap in the kisser.
The report demonstrates that gold made by those who dominated AIM in the pre-cloud era has turned to lead.
There is one rising star in AIM: Salesforce, thanks to the fact Gartner now counts integration and application Platforms as a Service (PaaS) in the broader AIM market.
The AIM market was either flat or grew in 2015.
The growing strength of the US dollar masked the fact that, if measured in constant currency, AIM as a whole grew by 7.8 per cent.
No constant currency, and with the dollar’s growth, the AIM market was flat – up 0.1 per cent to $23.9bn.
Growth in the constant currency world was driven by PaaS – specifically, integration PaaS and application PaaS.
Back in the pre-cloud era, Oracle but especially IBM dominated enterprise applications and application integration using their middleware glue.
2015, however, showed how these businesses are beached in the face of cloud.
IBM last year continued to make more than anybody else in AIM with 25 per cent of the market, but the giant’s revenue fell 13 per cent in 2014, to $6bn.
Number two Oracle took 13 per cent of the market but saw its revenue fall, too, by 3.8 per cent to $3.1bn.
Microsoft was the only big, on-prem name to see any growth: up 5.3 per cent to $1.1bn but still a long, long way behind the big pair – 4.7 per cent of the market.
Enter Salesforce: the CRM-as-a-Service shop saw a 36 per cent growth in revenue to $1bn, putting it just behind Microsoft, on 4.7 per cent of the AIM market. Driving that would be the fact is business apps are anchored on one, central platform with connected workflows and processes, helped by the existence of data and application connectors from third parties and interfaces to software and applications from those aforementioned enterprise giants.
Fabrizio Biscotti, Gartner research director, said in a statement Salesforce was disrupt AIM, a fact that underlined the trend of “cloud-only firms and smaller specialists picking up market share at the expense of traditional vendors in this space."
Keith Guttridge, Gartner research director, reckoned 2015 was the year iPaaS became a serious alternative to traditional software-based integration.
"Buyers are choosing iPaaS due to its lower entry costs, reduced operational demands and improved productivity. Vendor interest in this space is also growing rapidly, with the number of offerings doubling in the past 12 months,” he said. ®