Wednesday, September 26, 2007

2006 Software 500: Deep Concerns Over Security

The 2006 Software 500 reflects deep concern over information security as 40 % more companies than last year identified information security as their primary business sector, and those companies increased employees 40 % over the previous year.

Overall, total 2006 Software 500 revenue of $380.8 billion worldwide for 2005 represents just under a 1 % decline from the previous year, when total revenue was $383.3 billion. Total employees in the 2006 Software 500 declined just under 5 %, from 2,663,023 at the end of 2004 to 2,539,872 at the end of 2005.

Outside of the security sector, employee growth was strong in human resource management systems (39 % increase), healthcare (23 % increase), content management (22 % increase) and customer relationship management (17 % increase).

The top of the Software 500 saw few changes as IBM again took Number 1 with a 3 % increase in software and services revenue to $63.1 billion, and Microsoft placed in the second with 7.6 % growth to $36.5 billion in software and services revenue. EDS, Hewlett-Packard Co., Accenture and Computer Sciences Corp. were next at ranks three through six, reflecting the clustering at the top of the Software 500 of the largest system integration and services firms.

Among the fastest growing companies with more than $2 billion in revenue this year, Wipro Limited, at No. 28, stands out with its 117 % growth rate on its strength in system integration services from its India base. The company competes in multiple markets including CRM, business intelligence, software engineering and complex global application projects, such as those implementing SAP applications. Another standout is Infosys Technologies Limited, at No. 38, with a 50 % growth rate from the previous survey year. Also based in India, Infosys is also strong in system integration services and positions with its “Win in the Flat World” and Global Delivery Model taglines.

Most of 2006 Software 500 companies grew up to 24 %, 231 of them, while only 17 % or 84 companies reported declining revenue, eight fewer than last year.

Serena, at No. 126, shows notable growth among companies with between $100 million and $1 billion in revenue, registering 142 % growth. The privately held concern with mainframe roots is benefiting from its strategy to offers its change control capabilities across a range of platforms while keeping a strong technical focus on “Change Governance,” in its marketing parlance. Also growing at 142 % in this category by virtue of the merger of Concerto Software (last year at No. 144) and Aspect Communications, is Aspect Software, now at No. 82. The company is focusing its product portfolio strongly on the contact center. Privately held Infor moved up from No. 111 to No. 102 this year, on the basis of 126 % growth in revenue to $350 million, building on its core ERP applications to “Enrich, Extend and Evolve.”

Growing rapidly in companies in the $30 million to $100 million revenue range was Recruitmax Software, up 216 % in revenue on the strength of its products for recruitment, compensation and performance management — the employee lifecycle. (Note: Recruitmax changed its name to Vurv Technology Inc. in the spring of 2006.) Also growing dramatically in this revenue range was Click Commerce, up 128 % thanks to its on-demand supply chain focus. (Note: The company announced in September an agreement to be acquired for a value of $292 million by Illinois Tool Works, Inc., a diversified manufacturer of engineered components with 700 business units.) Also, Omniture, with its business optimization product line, had a strong showing of 108 % growth; and Aztecsoft Ltd., showed 99 % growth, relying on its software and quality engineering services.

Seeing strong growth among companies in the $10 million to $30 million range were: ActivCard Corp. growing 144 %, with its digital identity assurance products; NetQoS, Inc., supplier of network performance management products and services, growing 110 %; and Acronis, supplier of shrink-wrapped products focusing on storage management, growing 107 %.


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