Worldwide App Server Market Reaches $1.18 Billion

As the overall server market slowed in 2001, so too did the application server space. Revenue grew 20 percent, a sharp decrease from the 92 percent growth seen in 2000, according to Gartner Dataquest.

Worldwide application server new license revenue totaled $1.18 billion in 2001, up from $990 million in 2000. BEA exhibited the most growth, narrowly beating IBM to continue to lead the market with 34 percent of new license revenue.

IBM showed the strongest growth rate among the Top 5 vendors, gaining market share of new license revenue at the expense of Sun and other vendors

“The application server segment is splitting into low-end and high-end server solutions. On the high-end, IBM and BEA are pushing the millions of transactions per minute threshold. On the low-end, HP and Microsoft are basically offering the good enough ‘free’ technology to go after the small-to-medium size business and the low-end transaction processing markets,” Joanne Correia, vice president for Gartner Dataquest’s Software Industry Research group said, summarizing the results.

Source: Gartner Dataquest (May 2002)

According to Dataquest, all of the major software and server hardware vendors are pushing their application server strategy as the e-business platform for building enterprise applications. The research firm believes that the ongoing trend of packaging application servers with integration broker suites, packaged applications, portals, development tools, commerce platforms, and new software solutions, will increase dramatically in 2002 and will continue for the foreseeable future.

“This will result in the next evolution of application server technology in areas such as B2B, enterprise information portals (EIP), business process monitoring (BPM) and business activity monitoring (BAM). This will cause software vendors to continue to change the nature and packaging of their products,” Correia said.

“Application servers, portal software and integration brokers are merging into a new class of e-business platforms we call application platform suites,” Correia added. “This merging trend will continue through 2003, which means even more application integration market segments and vendor consolidation during the next 12 to 18 months.”

Additional stats about app server market share and where Dataquest believes the market is going are available in the Gartner Dataquest Research Brief, “IBM Closes Gap in 2001 Application Server Market.” This report examines the industry trends for 2001 and how the top-tier vendors performed.

Reprinted from Server Watch, an internet.com site

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