In terms of the composition of the Top Ten Software vendor list there has been relatively little change apart from the exit of Fineos and the entry of Cadcoevolution. Although figures from IDC suggest that software sales only grew by about five to six per cent the top ten appear to have put in much better performance growing sales by about 13.7 per cent. Many of these companies have been involved in acquisitions so the growth is only partly organic.
Two of the companies performed particularly well, namely the new entries – Cadcoevolution and Citrix. Cadcoevolution should has been in the table for the last couple of years and its success reflects the booming construction industry and the efforts to improve productivity in the graphics market place. Citrix’s success is attributed to improved marketing supported by a better organised channel. The apparent growth for CA is a little misleading as the figure used for 2004 was understated.
Microsoft’s position at the top of the table is unassailable as the company accounts for more than half of the total Irish software sales for the top ten. As the company extends its tentacles into the business application areas with CRM, ERP and accounting suites it can only strengthen its position in the market place. The expected launches of a new version of Windows and Office later this year will undoubtedly boost its position in 2007. The recent fanfare and optimism from Microsoft surrounding the launch of SQL Server 2005 is not reflected by its competitors (Oracle and IBM) that would still argue that SQL is not ready to play on the home turf of the established players.
Most of the vendors are quite optimistic about the outlook for 2006 and not just because the economy is motoring along nicely. Some of the vendors spoke about five to seven year purchasing cycles with the Y2K bonanza being the last big purchasing spree. Thus these companies are expecting a cyclical sales spurt on the back of this cycle as organisation review their IT strategies.
There appears to be a disproportionate reliance on the financial, telco and government market sectors although every one talks about the importance of the SME market place. Companies such as Sage, with strong accounting and CRM offerings, has certainly managed to capitalise on the growth in the number of businesses entering and growing within this market space. One of the underlying trends working in favour of IBM, SAP and Oracle is the wider adoption of data mining and data warehousing. Compliance is another issue that is helping to focus minds on the implementation of appropriate software solutions to minimise the risk of falling foul of the compliance and accounting regulations.
It appears this is a good time to be a software vendor as organisations struggle to improve productivity, lower costs, comply with ever more stringent regulations and grapple with the ever changing security stresses surrounding IT systems.
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