Software rankings: Microsoft in 1st, then IBM and Oracle
IDC recently published its annual report on software industry market share, which ranks software companies by revenue. According to IDC, despite Oracle's string of large acquisitions, including its pending acquisition of Sun, it will remain in third place behind Microsoft in first and IBM in second.
I received some interesting data points from the IBM PR team:
- IBM's software revenue in 2008 totaled $22 billion.
- Software represents a whopping 40 percent of IBM's overall profit, and 20 percent of its revenue.
- In 2008, more than 90 percent of IBM's segment profit was from software, services, and financing.
- IBM has acquired 81 software companies since 2003 and more than 100 software companies in the past decade (including Cognos, Filenet, Telelogic, Micromuse, and MRO Software).
- The R&D focus at IBM has shifted more toward software and services. More than 70 percent of the U.S. patents IBM received in 2008 (IBM's 16th straight year of patent leadership), were for software and services.
- IBM has been driving a shift to higher-profit segments (versus the low-margin commodity parts, which is why it got out of the PC, hard drive and DRAM businesses.)
- IBM is also getting greater margins from creating offerings that exploit the blurring of software and services, such as cloud computing and SOA.
A more difficult but possibly more interesting metric would be to understand the levels of adoption--that is, servers, users, etc., versus revenue--to get a better picture of the market. Of course, revenue and profit are all that really matters, but I'd like to know if IBM makes more money than Oracle on a potentially smaller installed base.
The big mystery is who else can Oracle buy in order to overtake IBM? It seems like industry consolidation has taken out most of the obvious candidates. Maybe this is where we'll start seeing Oracle acquire SaaS providers in order to gain fast-growing market share?
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Dave Rosenberg dishes up "Software, Interrupted" with nearly 15 years of technology and marketing experience that spans from Bell Labs to multiple start-up IPOs to open-source enterprise software companies. He is co-founder of MuleSource and currently serves as the general manager of Hardy Way. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can contact Dave via e-mail at softwareinterrupted@gmail.com or follow him on Twitter @daveofdoom. 
- by fxjamusa May 16, 2009 8:21 PM PDT
- You forgot to mention another important statistic that they intentionally overlooked. Despite their staggering profit and revenue numbers, they have outsourced thousands of jobs overseas. Hope this decision comes back to haunt them.
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- by knowles2 May 18, 2009 10:18 AM PDT
- They made a sensible choice, move people and manufactoring and development people to where the markets are new fresh and developing, which is not USA but china, and India.
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(3 Comments)This is the reason why America car industry is in such dire straights, it relied far to heavily on what is a saturated market while fail to expand overseas into markets where there hundreds of milllions of customers with out cars an they fail to build cars for these marks.
We live in a global society jobs will go where there is new customers and bigger demands which is not the US. Until there are no more new markets.