Infrastructure Software: Crux of the Matter

Dataquests Top 20 analyses over the last few years nicely captures the
evolution of the Indian software market. Initially, we analyzed the overall
software market and then decided to segregate it into systems software (Windows,
Linux, Unix and all OSes) and enterprise applications (that basically included
everything else). This year we analyzed enterprise applications (ERP, CRM, SCM,
BI among others) vertical applications (core banking, PLM, graphics software,
telecom software among others) and infrastructure software RDBMS, (middleware,
infrastructure management, development tools and productivity suites among
others).

RDBMS: Slow yet Crucial

Though this was the largest segment among the infrastructure software, FY10,
however, was almost a flat year for databases, as traditional spenders like
manufacturing, retail and SMBs postponed their capacity building projects and
this significantly brought down the requirements for and deployments of ISV
applications and also upgrades of existing applications. This, in turn, led to a
sharp decline of RDBMS growth in the first half of 2009. However, the database
market picked up in the second half of the year.

The growth enablers for the database segment were CRM and BI projects that
fueled the demand for databases. PSUs (Railways, SBI and Punjab National Bank),
insurance firms, white good manufacturers, FMCG and telecom embarked on huge BI
and analytics projects. With UID just kicking into action, and being a huge
database project that it is, the growth pattern might be interesting to observe
over the next couple of years. Other big government projects that involve
databases like the AP-DRP and MNREGA are further fueling the demand for
databases.

A major chunk of revenues in the latter half of 2009 came from data
warehousing projects like Rajasthan governments e-district project that went to
IBM. IBM also managed to sell 2.5 times more new licenses in the second half of
2009 than in the first half.

Oracle, which is by far the database king, managed to expand its footprint
further by grabbing almost all greenfield telecom operators. It also managed to
tap the market section with a big deals appetite, grabbing multi-million dollar
deals.

Microsofts SQL server too managed to grow in double digits driven mostly by
BI projects in PSUs and central government projects. The growth reflected in the
market share of Microsoft, as it climbed up to hold the second rung of the
ladder.

Middleware: No more Just the Middle Path

The middleware market is a virtual duopoly between Oracle and IBM; their
market shares vary over the years depending on how they define middleware and
their different approaches in selling middleware. FY10 has been no different.
Oracles middleware game got boost following its BEA acquisition two years back;
it was in FY10 that the BEA integration was finally complete.

Typically, Oracle always pitches its applications database and middleware
together and most of its major deals in FY10 like those with Aircel, Indus
Towers, CRIS and Bombay Stock Exchange reflected this. Oracle reiterated its
focus on financial services where it worked with a number of co-operative banks
who used Oracle RDBMS as well as Fusion Middleware. What helped Oracle was the
launch of its new version of OFM11g which offered increased functionality across
its product portfolio.

Major deals like Amul, Hindusthan Motors. Sun Direct, Innovation AutoRisk,
Datacomm Solutions (Videocon), Idea (for a service delivery platform), CINEPOLIS,
Konkan Railways and Digicable came to its kitty during the year. Though Oracle
finished ahead, some of its customers switched over to IBM during the year. The
reason: following the BEA integration, many customers complained that only some
of the new product features have been delivered while prices were raised and
they found IBM to be a cheaper alternative.

Infrastructure Management: The HP Show

HP was the undisputed leader in both enterprise management as well as
information management software. The acquisition of Mercury, Opsware and TRIM
over the last few years and their subsequent integration into the product fold
helped HP into the #1 position. Nearly 90% of the Top 100 enterprises in India
were using one or the other HP softwareit was either OpenView or any of the
other tools from Mercury or Opsware stable. TRIM 7 was launched during the year
and it already bagged clients both in the government and pharma sectors.

BSM 9.0, the latest version of HPs management solution, offered new
improvements by enabling enterprises to manage performance and availability of
applications irrespective of whether the application was running in an in-house,
outsourced, physical or virtual environment. It even allows access to data from
hand-held mobile devices.

HP also altered its software gameplan in sync with its cloud strategy. While
it launched both Cloud Assure and Communications as a service, its cloud server
automation initiative was to enable enterprises to architect their
infrastructure environment by automating both public and private clouds. In the
end:another HP focus in the application testing arena. Though several IT majors
including Infosys, Wipro and Cognizant are already into testing, HP sees it as a
major opportunity in the days to come.

CA was a distant #2 in the infrastructure management space. FY10 was a year
of restructuring and consolidation for CA. It defined its new go-to market
strategy and organized itself around five industry verticals (government,
defence, telecom, IT/BPO, BFSI). It also consolidated its product portfolio and
announced its cloud offerings. Acquisition spree was in full swing as CA
acquired 3 Tera, Net QoS, Oblicore and Nimsoftall companies producing cloud
softwares.

The ITSM solution market, dominated by the big four IT systems management
vendors, namely HP, IBM, CA and BMC Software remained extremely competitive with
a range of mid-tier and point solution vendors offering compelling alternatives
to enterprises. The likes of Kovair (who partnered Vedasoft) too made their
presence felt in the Indian market.

Development and Productivity Tools: The Microsoft Story

Microsofts big achievement in FY10 was, of course, the launch of its cloud
services. In the SaaS segment, India is its second largest market globally in
terms of number of users, totaling close to 750. It also launched cloud platform
Azure, and saw some success as biggies like Wipro, TCS, HCL Technologies and
Infosys began building applications on it. Office 2010 was another big launch,
already boasting of a million plus BETA downloads before it entered the mass
market.

While Microsoft Office still held the lions share of the market for office
productivity suites, Google was rapidly gaining ground. Google Docs, unlike an
offline suite, offers its services on the clouda metaphor for Internet.
Microsoft sought to plug this hole in the cloud by unveiling its Office 2010 a
couple of days back. The suite includes Web Apps, which allow business users
to store documents centrally and access them anytime, from anywhere, similar to
online office suites like Google Docs and Zoho.

Rajneesh De, Mehak Chawla

rajneeshd@cybermedia.co.in

mehakc@cybermedia.co.in