Recession hits project management software sales

Project and portfolio management software revenues declined 1.5 per cent last year

The project and portfolio management (PPM) software market failed to shake off the effects of the recession last year, seeing a revenue decline of 1.5 per cent, according to the latest figures from Gartner.

The analyst firm said that PPM software revenue decreased worldwide from $1.18bn (£769m) in 2008 to $1.16bn (£756m) in 2009, and that the combined market share of the top five vendors increased to 58 per cent from 43 per cent in 2008.

The market had seen five years of strong growth, and Gartner attributed the decline to "financial turmoil in late 2008 and subsequent spending uncertainties in early 2009".

Gartner explained that the near 10 per cent dip in growth rates had compelled vendors and new entrants to experiment with business and delivery models.

Oracle moved up from fourth place in 2008 to be the leading vendor in 2009, increasing its market share from 7.7 per cent to 22.6 per cent largely owing to its acquisition of Primavera Systems in December 2008, Gartner said.

CA increased its share by 14.6 per cent. A subscription-based revenue recognition business model saw the company drive the majority of its revenue from contracts signed up to five years prior to 2009.

"Falling growth rates provided flexible vendors and new entrants with the opportunity to be creative with business subscription and delivery models, such as software-as-a-service, and to drive revenue up by meeting client requirements," said Laurie Wurster, research director at Gartner.