IDC Forecasts Strong Growth for the Worldwide Software Market

FRAMINGHAM, MA — OCTOBER 16, 2000 — The worldwide packaged software market is well positioned for strong growth through 2004. IDC recently released its forecast, which indicates revenues will increase at a compound annual growth rate (CAGR) of more than 15% through 2004.


"Global economic growth, ebusiness Internet strategies, enterprise-to- enterprise supply chain support, and cybersmart computing continue to drive worldwide software revenue growth," said Tony Picardi, senior vice president of IDC's Global Software research.

Application development and deployment software, the smallest segment of the market, will be the fastest growing. Its revenues will increase at a CAGR near 20% from $36.5 billion in 1999 to $90.2 billion in 2004.

"As strategic business initiatives are turned into well-defined, well- executed Web strategies, demand for application development and deployment software tools will increase," said Stephen Hendrick, vice president of IDC's Application Development and Deployment research.

Despite the high growth rate, application development and deployment software will remain the overall market's smallest segment.

The applications segment is the largest and most fragmented segment of the software market. IDC expects its revenues will increase at the slowest pace, a 1999-2004 CAGR of just over 12%. However, this overall number masks the 30%+ growth anticipated in submarkets such as customer relationship management (e.g., sales, marketing, support, and call center), product information management, content and document management, and business performance management.

Revenue growth in each of the four regions that IDC tracks — North America, Western Europe, Asia/Pacific, and the rest of the world — will hover around 15%. However, North America, packaged software's largest market, will increase slightly faster than other regions with a CAGR of 15.5%. North America will account for more than half the market's revenues throughout IDC's forecast.

In terms of operating environments, the big news is Linux. IDC expects strong growth on Linux, especially in the applications development and deployment software segment. In this market, Linux's revenues will increase at a CAGR of almost 183%. Despite the strong growth, Linux's revenues will still be dwarfed by 32-bit Windows.

Information like the above can be found in IDC's report Worldwide Software Market Forecast Summary, 2000-2004 (IDC #B22766). The report divides the market into the following segments: application development and deployment, applications, and system infrastructure software. Each market is analyzed, and forecasts are provided through 2004 segmented by region and operating environment. Additionally, IDC compares vendors' 1999 revenues in each market. Key trends affecting each market are discussed. To purchase this report, contact Cheryl Toffel at 1-800-343-4952 extension 4389 or at

About IDC

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