Revenues in 2006 reached $11.7 billion from $10.1 billion the previous year, Gartner said. The research firm noted that software vendors had begun shifting their product mix from traditional application integration middleware to ESBs and BPM suites, in order to capitalize on customers' demands for process-centric applications. Also driving the shift was deployments of service oriented architectures.
"Additionally, continued market consolidation challenges small vendors' ability to compete," Gartner researcher Michele Cantara, said in a statement.
IBM maintained a strong lead in the global PPMW market, accounting for 31.8% of the total software revenue last year, Gartner said. Oracle showed the strongest growth rate among the top-tier vendors, increasing sales by 45% as a result of demand for its SOA Suite, ESB, and portal offerings, which leveraged the company's large installed base of databases and applications.
Following IBM among the top five vendors, and their market share, were BEA Systems, 10.5%; Oracle, 8.6%; Microsoft, 4.2%; and Tibco, 3.5%.
ESBs revenue grew 100% in 2006, making it the highest growth segment. SOA deployments drove the demand, as well as a revision of Gartner's definitions of the PPMW market, which added products to the ESB category.
The shift to ESBs did not mean application integration middleware, or AIM, was going away, Gartner said. Instead, the technology would become a part of product families that accommodate multiple integration options.
"Vendors will need to be exceedingly cautious to balance their product mix as they navigate this transition," Ms. Cantara said. "Newer products tend to be offered at a lower price point and in conjunction with smaller integration projects. These dynamics will require vendors who have focused on selling enterprise-wide integration to alter their go-to-market model and their pricing structures."
Gartner measures market share in terms of total software revenue, which includes sales of new licenses, updates, subscriptions, hosting, technical support and maintenance. Professional services and hardware revenue are not included.
The PPMW market segments include general-purpose portal products, BPM-enabling technologies, and application integration and platform middleware. BPM-enabling technologies include BPM pure-play software, business rule engines and BPM suites.