Software Revenue Rose 4.8% Last YearBy: Sean Patterson - March 31, 2014
The PC market is in a funk, with PC manufacturers scrambling to find a way to make desktop and notebook PCs relevant within the new reality of mobile tablets and smartphones. That doesn’t mean, however, that the software companies providing the applications for the PC market are headed the same way. As businesses and consumers push forward with their already-capable PCs, software sales are still growing.
Market research firm Gartner today released a new report showing that global software revenue hit $407.3 billion during 2013. This is up 4.8% from the $388.5 billion the industry earned during 2012.
Though it is clear that the software industry is enduring the hardware shift of the past few years, software itself is also undergoing a major transition. According to Gartner this shift involves companies that are both supporting existing traditional software infrastructures while rolling out new cloud-based solutions and pioneering other subscription-based services. Even many of those PC hardware companies that are struggling to hold back the rising tide of mobile devices are re-configuring their business models to rely more on enterprise software and security services.
“The software market has been changing shape over the past five years, and cloud is driving the bulk of this change as software vendors acquire and provide applications and infrastructure technology to support the cloud and the internet of things (IoT) movement,” said Joanne Correia, research VP at Gartner. “A clear indicator of this is that for the first time we have a pure cloud vendor in the top 10.”
The cloud vendor Correia referenced is Salesforce.com, a customer relationship management (CRM) company that provides businesses with cloud-based CRM solutions. Salesforce ranks tenth on Gartner’s list of the top ten software vendors of 2013 ranked by revenue. The company saw its revenues increase by over 33% year-over-year in 2013, up to $3.8 billion.
The list is led by the perennial heavyweight of the software business, Microsoft, which grew software revenue 6% to hit $65.7 billion in 2013. They are led by Oracle ($29.6 billion), IBM ($29.1%), SAP ($18.5 billion), and Symantec ($6.4 billion). Another heavily cloud-based business, VMware, rose to eighth place on Gartner’s list by increasing revenue 14.1% to $4.8 billion in 2013.