Budget cuts hit application development software sales

Application development software has seen a period of low or reduced investment

Businesses have cut back on software for application development projects during the recession, according to new research from Gartner.

Market revenues for development software fell by two per cent from $7.39bn (£4.85bn) in 2008 to $7.25bn (£4.75bn) in 2009, the analyst firm said.

"One of the main reasons for the decline in revenue in the application development market in 2009 was the de facto spending freeze on new projects in the early part of the year, which caused organisations to cut spending on new tools to support any new projects," said Gartner research director Laurie Wurster.

"Application development tool spending tends to be cyclical in nature, with strong years of spending, as we saw in 2007, followed by a year or two of low or reduced investment."

However, Wurster said that security development software had continued to grow during the economic downturn. As security breaches continued to highlight the need for good testing, organisations had increased investment in security testing software, she explained.

IBM leads the application development market, increasing its market share in 2009 to 28 per cent, partly owing to its acquisitions of Watchfire and Ounce Labs, which provided the firm with growth in the security testing market, Wurster said.

Microsoft holds a 15 per cent share of the market, followed by CA with 11 per cent.

Wurster expects spending in application development to pick up again, and increase two to three per cent this year.

"Java platform and dynamic web application tools will continue to see the biggest impact from open-source alternatives," she said.

"We expect consolidation of this market to continue, with larger vendors acquiring pure-play and point products to round out their suites and portfolio offerings."