Application server software platforms market faces "modest growth"

July 10, 2002
10 July 2002 -- During 2000 and 2001 the ASSP (Application Server Software Platform) market enjoyed dynamic growth and attracted a large number of vendors, according to recent research from IDC.

10 July 2002 -- During 2000 and 2001 the ASSP (Application Server Software Platform) market enjoyed dynamic growth and attracted a large number of vendors, according to recent research from IDC. In early 2001, IDC forecast continued substantial growth, with 2001 growth in Western Europe anticipated to be 70%.

The IT crisis of 2001 caused the actual worldwide market growth for ASSP to dwindle to 10.5%. The US market stagnated (0.1% growth) while Western Europe experienced 10.6% growth that IDC described as "disappointing". Other regions were not as badly impacted and achieved more respectable growth rates of 33.8% (Asia/Pacific) and 59.9% (rest of world).

Forecast growth for 2001 to 2006 is rather modest, with initial growth for 2001-2002 of slightly over 20%, falling to around 12% by 2005-2006. This still makes the ASSP market one of the more dynamic software sectors.

As 2001 progressed, web services became increasingly recognized as providing the potential for technology-independent interoperability, and the majority of vendors have now added basic web services capabilities to their ASSP products.

By the end of 2002 it is likely that support for the fundamental web services standards (SOAP and WSDL) will have become established as a "must have" feature. IDC believes it will then be virtually impossible to sell an ASSP product that does not have at least basic support for web services.

The report's major findings
- The biggest single impact on the ASSP market has been the economic downturn. In comparison with other sectors of the industry, ASSP suffered less than most, but the further impact was to dent confidence in those companies that had recently moved into the market.
- Western European ASSP revenues grew to USD590m, lower than forecast because of the market conditions that impacted the whole of the Western world.
- The market in recovery is likely to become commoditised and the number of vendors will consolidate.
- Vendors will rely on revenue from higher-level products based on ASSPs to retain their profitability. Basic ASSP will be provided as a freely downloadable product.
- The next logical stage will be that some of the application server functionality will be absorbed into the operating system.
- Increasing interest in deploying web services could drive application server software sales.
- By the end of 2006 - the forecast period - Germany will have been reinstated as the single largest revenue producer for the ASSP market, followed by the UK, then France and Italy. Combined, the Nordic countries represent a considerable market, their potential lying somewhere between Italy and France.

The report Western European Application Server Software Platform Market Forecast and Analysis 2002-2006 covers the ASSP market from a Western European perspective, with additional segmentation of the market by country and operating platform.

It examines the market and leading vendor performance and profiles for 2001 through 2006. IT identifies the characteristics that vendors will need to acquire if they are to be successful in the future. The study includes revenue and market share data for vendors in the ASSP market from 1999 through 2001.

www.idc.com

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