August 2014, IDC #250361

Competitive Analysis

Worldwide Application Performance Management Software 2013 Vendor Shares

Melinda-Carol Ballou Tim GrieserRohit Mehra Mary Johnston Turner

IDC OPINION

The worldwide application performance management (APM) software market is a competitive market

representing portions of several IDC functional markets including performance management, event

management, network management, and automated software quality. The overall worldwide 2013

APM software market total was slightly lower than previously forecast as slow/negative growth in older

legacy product revenue dragged down rapid growth by modern predictive APM analytics, SaaS

offerings, and APM solutions optimized for mobile and hybrid cloud applications. IDC analysis of

market activity during 2013 indicates:

The worldwide APM software market increased 10.0% over 2012 for total estimated revenue

in 2013 of $2.4 billion.

The top 3 vendors in terms of revenue were IBM, which held 15.2% market share; CA

Technologies with 13.6% share; and Compuware with 12.0% share.

The vendors with the highest growth rates over 2012 revenue included Splunk (132%),AppDynamics (100%), and New Relic (79%).

©2014 IDC #250361 1

IN THIS STUDY

This IDC study examines leading vendor shares and market trends in the worldwide APM software

market during 2013. Vendor shares from 2011 are provided for historic context. The most recent

worldwide forecast for this market will be published a forthcoming IDC document.

Methodology

The revenue estimates in this study are limited to commercial software license, maintenance, and

SaaS revenue using the methodology detailed in IDC's Software Taxonomy, 2014 (IDC #249238, June

2014). In addition, please note the following:

The information contained in this study was derived from IDC's Software Market Forecaster database as of May 9, 2014.

All numbers in this document may not be exact due to rounding.

For more information on IDC's software definitions and methodology, see IDC's Software Taxonomy, 2014 (IDC #249238, June 2014).

Only solutions that qualify as commercial software using IDC's methodology are included in

this analysis. Solutions that are primarily enabled via custom hardware platforms, ASICs, or professional services are excluded as they do not qualify as commercial software.

Worldwide APM Software Taxonomy

The term application performance management (APM) is being adopted by a wide range of application

development, test, quality, and systems and network management packaged software and SaaS

vendors. In general, vendors are embracing the term in an attempt to signal to customers that their

monitoring, testing, and analytic solutions can provide value to the business and can enable visibility

into application health and end-user experience. It is in effect an effort to distance their offerings from

more traditional systems and network management tools that focused on monitoring the health and

status of specific hardware or software components but did not provide an end-to-end user perspective

or business context.

In developing this document, IDC defines APM as a competitive software market representing

segments of several functional markets as defined by IDC's Software Taxonomy, 2014 (IDC #249238,

June 2014). Specifically, these are:

Performance management

Event management

Network management

Automated software quality

APM software focuses on monitoring, maintaining, and optimizing the performance and health of

business applications across development, test, datacenter, and network environments. Packaged

©2014 IDC #250361 2

software and SaaS solutions marketed as end-user experience monitoring (EUEM), real user

monitoring (RUM), and business transaction monitoring (BTM) are generally included in the APM

market. Many APM solutions include some level of IT analytics and correlation as part of the feature

set. To that extent, these analytics are core elements of the APM offering that are included in this

market assessment. However, standalone or general-purpose IT operations analytics solutions are

excluded.

APM solutions are distinct from more traditional component or system-level monitoring and testing

tools in that they are able to look across complex operational environments, discover hardware and

software dependencies and topologies, and track transactions, packets, and code traces on an end-to-

end basis that provides business application impact assessments and context. Increasingly, APM

solutions are incorporating advanced visualization and executive dashboards as well as predictive

analytics and modeling capabilities to enable rapid and proactive detection, diagnosis, and

remediation of application performance problems and incidents, whether the source is linked to code,

systems, or network issues. Both agent-based and agentless approaches, including synthetic

transaction monitoring, are included.

Network management products included in this market must specifically report on application

performance. Products that provide generic grouping's information based on protocols (i.e., HTTP,

CIFS, IP) are excluded. Console-based event correlation engines and event filters as well as system

infrastructure–level event analytics, modeling, and reporting products are also excluded. Solutions that

monitor cloud IaaS exclusively are excluded, although cloud-based APM services that monitor and

report on application health, quality, and availability are included.

Performance, stress, and load testing products and some static and dynamic code analytics products

and code analysis capabilities leveraged in conjunction with relevant APM portfolios (and tracked in

IDC's automated software quality market) are also included as they provide key capabilities for gaining

visibility into how well applications are performing in conjunction with real user monitoring. They also

provide the ability to discover and then remediate software problems. Functional and regression

testing as well as typical test management do not play a role in APM.

Performance and event management software products, application management, and network

management products that focus exclusively on system- or code-level event monitoring, log

management, system- or network-specific performance monitoring, reporting and analytics, and

related management packs and plug-ins are excluded.

Consistent with IDC's software taxonomy, this competitive market covers both packaged software

license and maintenance revenue as well as SaaS-delivered solutions. Software elements of

appliance-based solutions are also included.

Examples include:

Compuware APM (formerly Gomez and dynaTrace)

CA APM (formerly Wily)

IBM SmartCloud Application Performance Management and IBM Service Engage

Performance Management (portions thereof)

©2014 IDC #250361 3

HP Application Performance Management and HP APM Advanced for SaaS

BMC ProactiveNet and BMC End User Experience Monitor

Keynote Perspective

New Relic

AppDynamics

Riverbed SteelCentral AppInternals and Riverbed SteelCentral AppResponse

Examples of excluded products include:

IBM Netcool and NetView

HP Network Node Manager

HP Operations Manager

Based on IDC's analysis, the worldwide APM software market in 2013 totaled $2.4 billion. This

represents 10.0% growth from 2012 to 2013. This market assessment includes software deployed on

mainframe and distributed platforms as well as SaaS-delivered APM services.

Revenue estimates in this document are developed consistent with IDC's normal calendar year

revenue recognition and currency conversion methodologies.

SITUATION OVERVIEW

Worldwide APM Software Market in 2013

In 2013, the worldwide APM software market increased an estimated 10.0% to a total of $2.4 billion

(see Table 1). The top 5 vendors were IBM, CA Technologies, Compuware, HP, and Riverbed. They

collectively controlled 55.2% of the market.

©2014 IDC #250361 4

TABLE 1

Worldwide Application Performance Management Software Revenue by Vendor, 2011–2013 ($M)

2011 2012 2013 2013 Share (%)

2012–2013

Growth (%)

IBM 318.8 357.1 369.0 15.2 3.3

CA Technologies 319.9 330.0 330.0 13.6 0.0

Compuware 227.0 272.0 291.0 12.0 7.0

HP 229.5 231.4 218.0 9.0 -5.8

Riverbed 90.0 122.0 131.0 5.4 7.4

Microsoft 56.3 108.5 129.0 5.3 18.9

Keynote Systems Inc. 75.5 86.6 94.2 3.9 8.8

BMC 84.5 90.0 82.0 3.4 -8.9

Dell 62.0 67.0 71.0 2.9 6.0

Splunk 17.0 25.0 58.0 2.4 132.0

New Relic 14.0 31.0 55.5 2.3 79.0

AppDynamics 9.0 26.5 53.0 2.2 100.0

Attachmate Group 41.4 43.0 45.0 1.8 4.7

Oracle 22.4 29.9 33.4 1.4 11.7

SOASTA 11.0 17.0 28.0 1.2 64.7

Subtotal 1,578.3 1,837.0 1,988.1 81.7 8.2

Other 352.4 374.5 445.0 18.3 18.8

Total 1,930.7 2,211.5 2,433.1 100.0 10.0

Source: IDC, August 2014

©2014 IDC #250361 5

Share by Geographic Region

The Americas continue drive the majority of APM software spending, with 58.6% of revenue in 2013.

This is due in part to rising demand for APM solutions targeted at mobile applications and cloud-based

applications, as well as long-standing use of APM among very large Fortune 500 organizations

including financial services companies based in North America (see Figure 1).

FIGURE 1

Worldwide Application Performance Management Software Revenue Share by Region, 2013

Source: IDC, August 2014

Share by Operating System

APM solutions are deployed across a wide range of operating systems. IDC estimates that in 2013

Linux continued to take share from Unix, with Linux representing 14.4% of the market. Windows

continued to represent the largest segment, with 45.7% of revenue, while mainframe represented

20.2%. Unix provided 16.6% of revenue, a significant reduction from the 19.9% it represented a year

ago (see Figure 2).

©2014 IDC #250361 6

FIGURE 2

Worldwide Application Performance Management Software Revenue Share by Operating Environment, 2013

Source: IDC, August 2014

FUTURE OUTLOOK

Growth of the worldwide APM market slowed slightly in 2013 as legacy product sales dropped off

faster than fast-growing but lower-cost products and SaaS offerings could backfill revenue. As this

dynamic accelerates, vendors that are unable to rapidly transition product offerings will continue to see

revenue flatten or shrink as they lose share to fast-growing start-ups and innovators.

In 2014 and beyond, customers will demand solutions that provide rapid time to value, opportunities to

"try" before they "buy," and simplified pricing schemes that allow them to ramp up investment as

business needs dictate. Intuitive user interfaces and solutions that deliver value rapidly with minimal

specialized staff training required will also be warranted.

Demand for APM will benefit for increasing adoption of dev/ops continuous delivery methodologies

that require developers and operations teams to share insight into real-time production load tests, the

production performance impact of changes and updates, and the ability to evaluate end-user

experience across a wide range of personas and end-user devices.

The increasing availability of easy-to-deploy SaaS options is helping extend the addressable market

by providing affordable rapid time to value to a broad range of emerging service provides and midsize

organizations that might have found first-generation APM solutions to be too costly and cumbersome

to deploy effectively.

©2014 IDC #250361 7

ESSENTIAL GUIDANCE

IDC expects the worldwide APM market will continue to see customer interest in a variety of delivery

options, including continued strong interest in SaaS solutions. IDC expects many customers will

continue to rely on multiple APM solutions depending on the nature of their applications environments,

development skill sets, and network topologies. IT operations analytics solutions optimized for APM

will be integrated with log files and data feeds provided by multiple tools. Customers will prioritize

solutions that can effectively analyze and determine root cause across multiple data sets while

enabling proactive, predictive analysis to reduce errors and avoid service outages across traditional,

mobile, Web, and cloud applications using a common set of dashboards, GUIs, and analytics.

Successful vendors will respond to these needs by continuing to streamline solutions, expand the

range of environments supported, provide both SaaS and on-prem solutions, and enhance analytics

and query tools.

LEARN MORE

Related Research

Worldwide Network Management Software and Appliance 2014–2018 Forecast and 2013 Vendor Shares (IDC #250021, July 2014)

IDC's Software Taxonomy, 2014 (IDC #249238, June 2014)

Worldwide System Management Software as a Service 2013 Vendor Shares (IDC #248887

May 2014)

Worldwide Performance and Availability Management Software 2013 Vendor Shares (IDC

#248796, May 2014)

Worldwide Distributed Performance and Availability 2013 Vendor Shares (IDC #248837, May 2014)

Worldwide Cloud Testing and ASQ Software as a Service 2013-2017 Forecast and 2012 Vendor Shares: Driving Quality Adoption (IDC #245161, December 2013)

IDC MarketScape: Worldwide Production APM Software as a Service 2013 Vendor Analysis(IDC #243716, October 2013)

Worldwide Application Performance Management Software 2013–2017 Forecast: Cloud and Mobile Fuel Rising Demand (IDC #242875, September 2013)

Worldwide Automated Software Quality 2013–2017 Forecast and 2012 Vendor Shares: Lower But Ongoing Growth Driven by Mobile, Cloud, and Complex Deployments (IDC #241927, June 2013)

©2014 IDC #250361 8

Synopsis

This IDC study examines the worldwide APM software market for 2011–2013. Revenue and market

share of the leading vendors are provided for 2013.

"Worldwide APM software revenue grew by 10.0% in 2014 to reach a total of $2.4 billion," according to

Mary Johnston Turner, research VP, Enterprise System Management Software. She explains, "IBM,

CA Technologies, Compuware, HP, and Riverbed have a combined worldwide market share of 55.2%,

but their market leadership is under pressure from fast-growing new entrants such as Splunk,

AppDynamics, and New Relic as well as increasing Microsoft capabilities in this area."

About IDC

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