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Software infrastructure

By Isabelle Chan, ZDNet AsiaToday's business goals remain the same despite the growing complexities of IT infrastructures. Management expects the IT department to keep the computer networks and daily business operations running as smoothly and cost-effectively as possible.

By Isabelle Chan, ZDNet Asia

Today's business goals remain the same despite the growing complexities of IT infrastructures. Management expects the IT department to keep the computer networks and daily business operations running as smoothly and cost-effectively as possible. In response, every software company, ranging from the database management to application management tool companies, has focused on making its products more reliable, easier to use, and cheaper to operate.

This directive for IT to do more with less also explains the huge growing interest in open-source software. Therefore, it's no surprise that Red Hat ranks among the ZDNet Asia Top Tech 50 companies in the software infrastructure segment which includes database management, middleware, application delivery, and systems management. The Raleigh, N.C.-based Linux seller outpaced analysts' revenue and profit expectations for its most recent quarter.

As expected, IBM, Microsoft and Oracle made it to the Top Tech 50 Index. These three companies led the worldwide relational database management software market for 2004, according to research analyst firm IDC.

Oracle CEO Larry Ellison, who has been vocal about supporting open source, hopes to double the software giant's revenues to US$30 billion over the next few years, and he plans to achieve it with an acquisition strategy.

Microsoft, which spent much of 2005 trumpeting the next release of the Windows client, as well as the upcoming Visual Studio 2005 and SQL Server 2005 products, has reorganized itself into three new divisions.

Industry analysts expect the software industry to consolidate further as the players race to expand their product portfolio and international reach, and no sector will be immune. For example, Hewlett-Packard announced on Sept. 19, 2005, plans to acquire Peregrine. Upon completion, Peregrine's IT asset and service management software portfolio will be integrated into the HP OpenView business unit.

Other mergers and acquisitions in the systems management segment include IBM's purchase of Candle and BMC's Marimba acquisition in 2004.

Another important area that has gained interest and grown in importance is application management and delivery. IT departments continue to be pushed to deliver higher-quality applications that the business can also be faster to market. Therefore, as the emphasis on IT compliance and governance grows, expect more noise from companies like Mercury that track change and performance of applications during their lifecycles. Growth is expected to be higher in the application life cycle management segment as compared to the more mature markets such as the database management software markets, according to research firm IDC. The growing importance of integration will help drive the deployment market, the second largest contributor to the overall application development and deployment market size.

Competition continues to be rife in the middleware front among IBM, BEA and Oracle. Due to a strong surge in demand for application management services, the worldwide market is expected to grow at an overall compound annual growth rate (CAGR) of 9.2 percent and reach US$27.2 billion by 2009. According to IDC, about US$18 billion was spent worldwide on application management (AM) services in 2004.