Gartner today reported that worldwide software revenue totaled $407.3 billion in 2013, a 4.8 percent increase from 2012 revenue of $388.5 billion. Microsoft retained its spot as the No.1 software vendor with a revenue of 65.7 Billion on a growth rate of 6%. Oracle surpassed IBM to became No.2 software vendor worldwide.
“Investors continue to focus on revenue growth and market share gains as the primary criteria when evaluating vendors,” said John Rizzuto, research vice president and Invest analyst at Gartner. “At this point, the new and emerging technology markets in software, such as digital marketing and public cloud computing, are so nascent that investors are favoring those companies that are early and aggressive in grabbing both market and mind share — in many cases dismissing progress on earnings and cash flow in hopes that they will one day follow.”
The software industry is in the middle of a multiyear cyclical transition as organizations are focusing investment on technologies to support existing system structure, in order to maintain competitiveness, while still taking advantage of cloud/subscription-based pricing where it makes sense to grow and advance the business.