EMEA Application Integration and Middleware Market is Set to Grow Seven Percent in 2005 but the Industry Outlook Remains Challenging

Europe, the Middle East , Africa (EMEA)

Gartner: Revenues for application integration, middleware (AIM) and portal new licenses will grow 7.4 percent in Europe, the Middle East and Africa (EMEA) in 2005, progressing at similar rate to 2004. AIM and portal new license revenues totalled $2.0 billion in EMEA during 2004, a 7.4 percent revenue increase over the 2003 total of $1.9 billion. Most of the software purchased in EMEA is bought in Euros, paint a bleaker picture. Taking into account actual currency, the EMEA AIM market will decline 0.5 percent in 2005, following a decline of 3.5 percent in 2004 — from €1.69 billion in 2003 to €1.63 billion in 2004. Nevertheless, these results represent an improvement from the 9.5 percent decline (in actual currency) recorded in the region in 2003 over 2002. Application integration is at the core of the new wave of innovation in business applications and their enabling infrastructure and, accordingly, the market will continue to improve at a slow but steady pace. However the high levels of market growth experienced in the late nineties are unlikely to return for the foreseeable future. Although the concept of integration and the usage of modern application platforms have become mainstream, the market is not getting any easier for software providers. Competition has intensified, software mega-vendors have strengthened their offerings and new players, focused on web services and Enterprise Service Bus technology, have entered the market. That leading vendors in the AIM industry throughout EMEA had mixed fortunes in 2004. IBM maintained a clear lead with 43.7 percent market share in 2004, although this leadership varies significantly according to individual market segment*. While IBM is the clear market share leader in message-oriented middleware (MOM), application servers and in transaction processing middleware (TPM), it faces fierce competition in integration suites and horizontal portals. Microsoft's positive performance in the portal and integration suite segments enabled the company to move into the top five ranking for the first time in 2004. The company's new license revenues in that segment increased by 116.7 percent. EMEA Application Integration and Middleware New License Revenue for 2004

Gartner Application Integration and Web Services Publ 20050613