Business software market to be worth $267bn this year

Global revenue from the business software sector is set to reach $267bn this year, with Microsoft continuing to lead the market, according to analysts at Ovum.

The business software sector will continue to grow at a compound annual rate of 7.7 per cent over the next four years, reaching revenues of $358bn in 2015, according to the Global Market Trends 2010: Business Software Forecasts Report.

Information management software will generate the most revenue of all the business software areas, growing at a rate of around 10 per cent from 2010 to 2015.

The strong growth in the software market will be driven by the need for businesses to manage ever-increasing data volumes and the transition to cloud computing, explained Tim Jennings, chief analyst at Ovum.

"The volume of information within enterprises continues to grow at an astonishing rate, and investment is needed to both manage this information and turn it into actionable intelligence, through technologies such as business intelligence and analytics," Jennings noted.

"[Use of] cloud computing will accelerate over the next five years as organisations move further towards a software-as-a-service model and take their datacentres towards the hybrid public and private cloud infrastructure."

Growth will also be boosted by the strong demand for mobile applications as smarpthone usage increases, and vendors will have opportunities in emerging markets such as South East Asia and Latin America, he continued.

Meanwhile, Microsoft has retained its position as the world's top software provider, generating revenues of $62bn in 2010, according to Richard Edwards, chief analyst at Ovum.

The Windows manufacturer has more than 20 per cent of the market, and although it remains ahead of Oracle, IBM and SAP, the firm is "doing just enough to stay in the game".

"Microsoft's online services division is still in its 'investment phase' as even though it generated revenues of $2.2bn in 2010 (four per cent of total revenues), it still posted a $2.3bn loss for the fiscal year," he noted in the Microsoft Market Review report.

"In terms of services, Office 365 is Microsoft's big bet for the enterprise and the cloud. However, service-based email, collaboration, and communication offerings from a variety of providers, including IBM and Google, still present a challenge to the company."