To boost growth, vendors need to scale up their investments on innovation and should focus on offering value to the customers
Big data and cloud set the tone of this market in FY14. The vendors continued to carve ways to reach out to customers and show them value putting in perspective challenges that might crop up in their businesses. While many segments witnessed a laggard growth, customer sentiment was upbeat but limited to knowledge-enhancement. Investments trickled out slowly. Like every year, this segment was purely dominated by the biggies such as Oracle, Microsoft, IBM, HP, and SAP. They steered into new areas and verticals in search of customers and tried to open up doors for mid-tier market.
Database Under Spotlight
It is a universal truth that a number of enterprises are concerned about the data they are generating on day-to-day basis. This led them to invest in database managment. In addition, an aggressive marketing strategy supporeted by best-of-breed products and solutions by vendors drove this market further.
Plus big data is really big and will stay, influencing market dynamics in the enterprise sector. Looking at the growing market for data storage and data management needs, several vendors such as Oracle, SAP, Microsoft, etc, have left no stone unturned to grab the marketshare. Surely Oracle holds the 63% database market in India. However, the opportunity is so big that even the smallest vendors tried to make their ways into the growing database market in India. Players such as MangalDB and EnterpriseDB sought their way in the market. MangalDB is a growing startup which has of late grabbed attention from peers and customers. Its biggest customer in India is UIDAI.
In FY14, Oracle continued to be an undisputed leader in the RDBMS space with 63% marketshare, followed in distance by Microsoft with 16% marketshare. IBM was a close with 14% whereas SAP still holds 4% market. Although SAP is trying its best to woo customers for its HANA platforms, the company is still not able to count beyond a few customer wins.
The use of multiple delivery models, increased reliance on governance technologies, and the convergence of application and data integration requirements drove organizations to sustain investment in middleware technologies and skills. In addition, emerging opportunities such as cloud computing, Internet of Things, mobile enablement, intelligent business operations and in-memory computing are all areas in which middleware providers continued to play an active role as innovators.
In India middleware market witnessed a growth of mere 5% but vendors are hopeful of demand growing in the backdrop of cloud, IoT, and mobile. Slow growth is a result of the previous year effect when enterprises tried to stay away from middleware investments.
In terms of vendor dynamics, IBM retained the #1 position with 34% marketshare closely followed by Oracle with 30% marketshare. The rankings of the top four vendors have not changed over the last three years; however, they are showing mixed performance under pressure from specialized vendors, in particular PaaS providers and open source software suppliers.
According to Gartner, organizations that take advantage of the digital era’s opportunities are realizing that their established application infrastructure middleware strategies are no longer adequate. Enabling digital business transformation requires IT organizations to operate with much greater agility and “on demand”. They must provide much deeper business insights, web scale systems and the ability to integrate myriad of endpoints, such as mobile apps, cloud-based applications, social networks, heterogeneous data sources and a growing number of ‘things’.
To support these requirements, IT departments need to refresh their application infrastructure adding the capabilities needed to rapidly scale their systems, inject real-time operational intelligence into business processes, and target an adaptive approach to integration.
To this end, traditional, feature-rich, but also expensive, middleware products are being increasingly complemented—and at times replaced—by lightweight, low-cost technology aimed at enabling much faster time to value. This is one of the reasons why most traditional middleware vendors are growing only modestly, whereas open source software middleware vendors and PaaS providers are achieving double-digit growth.
The need for web scale and operational intelligence is paving the way for the adoption of in-memory computing technology and is boosting the rapid growth of in-memory computing vendors. Adoption of these new technologies poses formidable new challenges to IT departments, but those who do not have the nerve to tackle them and become change agents will risk being marginalized as more IT budgets move toward lines of business and departments within the organization.
Development and Productivity Tools
Microsoft’s constant effort to catch on the cloud race ahead of competition paid off well for the company in India. The company has begun to adopt innovative ways to add customers to its Azure platform. In an attempt to multiply numbers and reap on the cloud hype, Microsoft recently allowed its over 10,000 channel partners in India to offer the Azure cloud platform to enterprises, a move that can enable the company to reach thousands of small and medium enterprises (SMEs) in the country. Microsoft is making Azure available in the open licensing catalogue for India. With this move, SMBs in India will be able to purchase Microsoft Azure cloud platform from their local IT partner. Earlier customers purchased Azure either directly from the Azure website or as part of an Enterprise Agreement (EA) with Microsoft. Its innovative efforts have taken the market up by 18% in India. It accounts for `2,227 crore in India.
As far as productivity suites market is concerned, Microsoft is again an undisputed leader with no near competitor. However, it faces challenge from Google Docs and OpenOffice which are gaining marketshare slowly. To counter this challenge the company tried to enhance its online email portfolio making all its solutions available. Plus its efforts to boost Office 365 in which it bundles its productivity suites also witnessed traction.
The size of the market for productivity suites is witnessing a slow growth. While it accounted for `970 crore in FY14, its growth was only 9%. Microsoft seems to have sensed the challenges in this space. That is the reason it is investing in cloud-based solutions to woo customers. Its focus on Windows 8 is one such step to make all its applications easily accessible from a single point.
Systems Software Market
Systems software market witnessed 7% growth in FY14. Most businesses were confused as far as investments on new PCs was concerned. Even Microsoft’s Windows 8.1 struggled to spark the growth. It was only until Microsoft rang the death bell to its XP operating system. So in the latter part of the year, a movement began in most verticals to upgrade to a newer operating system. The biggest buyers to upgrade to a newer software were BFSI customers. Plus Microsoft ran a campaign to woo customers and spread awareness on the risks of XP without support.
Microsoft is facing a big challenge from Google’s Andriod platform as many sales-oriented enterprises are investing in Andriod-based tablets and not buying notebooks for their workforce. Plus Google has pitched its Chromebook in the market to compete with Windows. During the year, there were reports showing the user interest in the Chromebook. As the connectivity ans speed of internet improves in the country, Chromebook and solutions similar to this are expected to catch user interest.
Besides, enterprises from logistics and other sectors sought open source solutions such as Linux. Linux is a primary operating system in several datacenters across verticals because of openness.