Information Technology Industry Overview

Business Processes Outsourcing Market Definition

IT Services Market Characteristics

The middleware software market consists of sales of middleware software. It connects enterprise applications or software components and provides an infrastructure that enable the development of business applications. Middleware Software also facilitates high availability functionality and provides core services such as transactions, concurrency, messaging, and the SCA framework for service-oriented architecture (SOA) applications, threading and security to an enterprise. Middleware software seamlessly integrates all the business processes, applications and platforms to help businesses reduce their total cost of ownership (TCO) and increase their return on income (ROI). The global middleware software market was valued at about $35.81 billion in 2018 and is expected to grow to $46.56 billion at a CAGR of 6.8% through 2022. The middleware software market has been geographically segmented into North America, Western Europe, Asia-Pacific, Eastern Europe, South America and Middle East & Africa. The North American market is the largest market for middleware software and is expected to continue to do so during the forecast period. Movement of manufacturing organizations towards Industry 4.0, the latest revolution, which focuses on automation, interconnectivity, real-time data and machine learning is expected to benefit the middleware software market in the forecast period. Industry 4.0 includes the latest technologies such as Internet of Things (IoT), machine learning, cloud computing, cyber-physical systems and cognitive computing which are equipped in the computer systems and automated machines including robotics. Manufacturing companies need to integrate with their business processes and operations with these platforms/technologies which is fulfilled using middleware software among others. Thus, the extensive adoption of latest technologies by manufacturing companies are driving the growth of middleware software market. For instance, middleware has made possible the development of Robotics Operating System (ROS), a robotics middleware, which is a collection of software framework, and toolsets upon which robotics systems can be created. The development of industrial automation across business activities is driving the demand for ROS. Data privacy concerns and security risks are expected to limit the growth of the middleware software market. Data privacy concerns and security risks in middleware software involves risks of loss, theft and tampering of data when large amount of data needs to be exchanged between various applications, and platforms to work in a collaborative environment. For instance, there were about 918 reported breaches that compromised 1.9 billion data records during the first six months of 2017 and according to a report from Cybersecurity Ventures, cybercrime, as a whole, would cost the world more than $ 6 trillion by 2021. One of the latest trends in the middleware software market is the advent of cognitive computing which helps to create new products and services on the basis of its understanding of machine learning and content analytics. This is a technology of imitating human brain by using self-learning techniques with the help of natural language processing, pattern recognition, and data mining. Cognitive computing in the middleware software enables the systems to analyze previous data and helps in quick decision and also enables exchange of information between various devices and applications. For instance, cognitive computing in healthcare middleware software helps doctors to analyze and understand previous cases and make decisions for current similar cases. The strict guidelines of Sherman Antitrust Act break the split of regulations for middleware software. Section 1 of the Sherman Antitrust Act bans all the agreements that affects fair practices in trade such as fixing and determining the price before the deal or auction takes place, refusals to deal, collusion of parties to choose the winner of the bidding process whereby other submits non-competitive bids. Section 2 of the Sherman Antitrust Act forbids any person, group of persons, or any entity from monopolizing or attempting to monopolize its position in the market. Therefore, the companies in middleware market are required to share interoperability information with third party manufacturers of middleware software in order to promote fair trade and market practices. In June 2018, Oracle acquired DataScience.com for an undisclosed amount. The acquisition is expected to provide a data science platform to the Oracle Cloud which enables customers to fully utilize machine learning. It also allows the customers of both Oracle and DataScience.com to use big data and machine learning applications for predictive analysis and business results. DataScience.com is a company which analyses data by extracting knowledge using human and machine powered solutions. It was established in 2014 and is headquartered in Los Angeles, California, USA. Major players in the market are Microsoft Incorporation, Oracle Corporation, IBM Corporation, Fujitsu and Red Hat.

The storage and backup software market consists of sales of storage and backup software. The software provide users and programmers with a systematic way to create, retrieve, update and manage data. This software allows users to read, update and delete data, which can then be fetched directly and/or through programmatic access. The global storage and backup software market was valued at about $9.75 billion in 2018 and is expected to grow to $14.23 billion at a CAGR of 9.9% through 2022. The storage and backup software market has been geographically segmented into North America, Western Europe, APAC, Eastern Europe, South America and Middle East & Africa. The North American market is the largest market for storage and backup software and is expected to continue to be the largest market during the forecast period. Growing volume of data and the awareness among organizations to backup and protect their data are expected to benefit the storage and backup software market in the forecast period. In addition, the growing adoption of cloud-based technologies, and the need for storage and protection across all enterprises are also driving the growth of storage and backup software market. For example, it is estimated that more than 72% of global enterprises will shift to cloud storage from on-premise data centers, by 2022. Rising concerns about data privacy and governance are expected to restrain market growth. Security concerns over protecting information regarding stakeholders and private data caused due to hacking, espionage and other security threats restrict the deployment of cloud storage and other software for storage and backup. These factors invariably limit the storage and backup software market. For example, industries such as BFSI, healthcare, retail, and others are unwilling to invest in the market due to security issues, thus restraining it to grow at its full potential. One of the latest trends in the storage and backup software market is the adoption of artificial intelligence (AI) based applications which can create, store and protect data. Artificial intelligence is an area of computer science which simulates human intelligence. AI based applications create information on their own and verify the source of information before composing bits of knowledge to a database. These applications can also refine database management policies, align data to database capabilities and assess metadata across organization storage infrastructure. For instance, Commvault, one of the major vendors in the field of storage and backup software, introduced a new kind of backup and recovery software, which works with AI. This software helps users to keep data backup and recovery more efficient and effective by analyzing their patterns and performance. The European Parliament and Council's General Data Protection Regulation (GDPR) break the split of regulations for the security of transactions in the European Union (EU). GDPR will replace the Data Protection Directive 95/46/etc. in spring 2018 as the primary law to protect the personal data of EU citizens. The legislation reshape the way in which the data is handled across every sector and also gives customers the right to be removed from the records of companies even if they have previously agreed to the collection and storage of their data which is called the ‘right to be forgotten’. For instance, IBM, as a primary system integrator, helped a European telecom company to update its applications to comply with GDPR by modernizing data infrastructure and governance. In January 2019, Amazon Web Services Corporation acquired Dell-Backed Cloud Endure in a deal valued in the range of $200 million to $250 million. The transaction is expected to enhance Amazon's ability to deliver innovative and flexible migration, backup, and disaster recovery solutions. Cloud Endure is a provider of continuous backup and enterprise-grade business continuity solutions for businesses. The company was established in 2012 and is headquartered in Ramat Gan, Israel. Major players in the market are Dell Inc., HPE, Netapp, Hitachi and IBM.

The enterprise resource planning (ERP) software market consists of sales of enterprise resource planning software. ERP software helps to connect the various departments in a business for the smooth flow of communication and information by providing a central database. This central database is a shared database which gathers, stores, analyzes and interprets data, allows any department to retrieve required information at any time, and supports multiple departments with ease. The global ERP software market was valued at about $76.8 billion in 2018 and is expected to grow to $105.26 billion at a CAGR of 8.2% through 2022. The ERP software market has been geographically segmented into North America, Western Europe, Asia-Pacific, Eastern Europe, South America and Middle East & Africa. North America market is the largest market for ERP software. Increased need for bringing efficiency and transparency in the business operations is expected to benefit the enterprise resource planning software market in the forecast period as ERP enables the integration of high volume of data among several departments and manages the flow of information and communication throughout the organization. In addition, the use of cloud based technologies for storing and accessing real time data, analytical reporting for business decisions and the need to meet the industry standards processes which are already implanted in the software are also enhancing the growth of the market. For example, Annabelle Candy implemented the STSPRO ERP, an ERP software provided by SYSPRO for manufacturing and distribution industries enabled them to expand their marketing practices to more locations and track their progress with ease. Increasing number of cyber-attacks are expected to limit the growth of companies in the enterprise resource planning software market during the forecast period. These attacks on ERP applications including compromise and distributed denial of service (DDoS) attacks damage the operations of businesses. According to Onapsis, which is an ERP cyber security and compliance firm, ERP applications such as SAP and Oracle have a combined total of over 9000 security vulnerabilities. One of the latest trends in the ERP software market is the integration of block chain technology with ERP. Block chain is a chronological series of data managed by multiple computers owned by multiple entities, and each block of data is secured by a cryptographic code. ERP vendors need to keep their software updated in order to maximize the value addition provided to their clients. Integration of ERP with block chain will create a secured platform for collaboration, through which systems of records can be freely shared to trusted parties. For example, SAP, a software company, is exploring ways in which it can implement block chain efficiently to its existing ERP. It is trying to integrate block chain to ERP to improve 3D printing and digital manufacturing. The strict guidelines taken by the UK and French governments on Internet of Things (IoT) device manufacturers break the split of regulations for ERP software. The adoption of advanced technologies such as IoT and machine learning in almost all the applications including ERP resulted in a lot of fraud practices and the need to prevent such practices through stringent regulations. Some examples of regulations are the stringent guidelines implemented by the French government and the UK government which have to be followed by IoT device manufacturers. These strict regulations hinder the growth of the market and prevent other companies to enter the ERP market. For instance, leading ERP software vendors such as SAP and Oracle have been looking at ways to integrate the latest technologies including IoT and machine learning, but the strict policies constraining the development of their products are restricting the growth of the market. Major players in the market are SAP, Oracle, Microsoft, Epicor and Infor.

The business intelligence software (BI software) market consists of sales of business intelligence software. This software enables users to project information, visualize data, derive insights, improve business operations and make strategic business decisions. The components of business intelligence are source data, data warehouse, and online analytical processing (OLAP), visualizations, dashboards, and extract, transform, load (ETL) processes. The global BI software market was valued at about $14.3 billion in 2018 and is expected to grow to $28.77 billion at a CAGR of 19.1% through 2022. North America was the largest region in the business intelligence software market in 2018. This region is expected to remain the largest during the next five years. The business intelligence software market in Asia Pacific is forecasted to register the highest CAGR during 2018-2023. An increase in data-driven projects aids BI software market growth due to a substantial rise in the demand for real time analytics in the historic period. According to International Data Group (IDG) prediction, 69% of the businesses are planning or implementing data-driven projects in order to enhance production and sales, better decision making, strategic planning of business and others. Companies in the industry are using nosiness intelligence software in order to predict consumer behavior and engagement with their products and services. For instance, Starbucks started using the business intelligence software along with CRM software for predicting the purchasing behavior of the customers. Companies in the end user industries are increasingly adopting cloud based business intelligence tools in order to enhance security, access from anywhere online and benefit from the advantages of economies of scale. The cloud-based BI software is a virtual network, can be accessed via internet hosted on the vendor’s servers to aid efficient connectivity of devices. Cloud-based BI software benefit the companies with its cost effectiveness and low investment as no additional hardware costs are involved, short implementation time and others. According to International Data Corporation (IDC), in 2018, 50% of the IT infrastructure spending is on cloud based tools and for efficient data storage it is expected to grow to 60-70% by 2020. In May 25, 2018, European Union has implemented a regulation called GDPR to impact business Intelligence software market with principles on data protection, data minimization, data retention, and confidentiality. This regulation emphasizing on securing and safeguarding the consumer data, allows only minimum amount of personal data and restricts the access to extract complete data. The rules on the areas of storage limitation, data minimization might affect the BI software market in terms of analysis and accuracy. In 2018, Cisco Systems Inc., acquired Accompany, an AI-driven business intelligence startup for $270 million. This acquisition enables Cisco to enhance artificial intelligence and machine learning capabilities, and strengthen relationships through AI-driven business intelligence platform. Accompany, develops an artificial intelligence-driven relationship intelligence platform, by offering mobile application and Web-based products for professionals to grant contextual insight into the relationships. The company was founded in 2013 and is headquartered in Los Altos, California, USA. Major players in the market are Microsoft BI, IBM Congnos, SAP, SAS and Oracle BI.

The customer relationship management (CRM) software market consists of sales of customer relationship management software which helps to build strong relationships with its customers. It analyzes the customer interactions and automates the activities identified with deals, advertising, and client support throughout the customer lifecycle. It causes the organizations to remain associated with their clients and improve productivity and furthermore helps in streamlining work forms. Some of the CRM software include Agile CRM, Recruit CRM, Sales mate CRM, NetSuite CRM. The global CRM software market was valued at about $25.5 billion in 2018 and is expected to grow to $36.53 billion at a CAGR of 9.4% through 2022. The CRM Software market has been geographically segmented into North America, Western Europe, Asia-Pacific, Eastern Europe, South America and Middle East & Africa. The North American market is the largest market for CRM Software and is expected to continue to be the largest market during the forecast period. Increasing number of customers of the organizations and the rising need for customer satisfaction are expected to benefit the customer relationship management software market in the forecast period. Organizations should offer customized services to customers, gain better knowledge of their purchasing habits and other details, develop cross-selling opportunities and create competitive differentiators to retain existing customers and to attract new customers. These drive the demand for the use of CRM software in organizations to understand their customers in a better way and to maintain a good relationship with them. For example, Apollo Hospitals has implemented custom designed CRM software of Veon Consulting which resulted in high user adoption, 27% cut in the timeline of the review process, efficient handling of patient visits and outcome which saved manual efforts by 42%, and effective reporting and dashboards which reduced number of travels by 50%. Rising number of security concerns are expected to limit the growth of companies in the customer relationship management software market during the forecast period. Security concerns have been increasing in the recent times due to online availability of personal data. CRM and similar software's store large databases online and these data of customers are accessed by teams around the globe which poses the potential for mistreatment of data. The data in the CRM software and other software's faces security concerns including corporate/competitive espionage, fraud, ID theft, nations-state espionage and unauthorized sales of data to third-party. These issues restrict the growth of CRM software. For example, CRM software in Bank of America and Citibank were once hacked to steal the user log-in credentials. Social and Mobile CRM are increasingly integrating social media channels into CRM platforms to offer to its full capabilities on every smart device by having a real-time access at any place or time. This integration helps to achieve greater productivity, better customer experience, and access to more relevant information. Advertisers have embraced social media platforms to associate and share with customers for improving products and perceptions. These also help businesses to manage customer grievances, requests, and inquiries. More number of users can access the data using social and mobile CRM. For example, Wells Fargo has implemented social CRM to engage with the customers and improve their availability. Wells Fargo also uses CRM to solve customer queries. The EU’s General Data Protection Regulation (GDPR) break the split of regulations for the safety and security of transactions in the European Union (EU). Global Data Protection Regulation has been implemented on May 2018. It imposes stringent requirements for collecting, storing, and managing personal data by businesses. Personal data includes name, email, address, date of birth, personal interests, digital footprints, and more. CRM software also stores similar kind of data and have to follow GDPR. Many companies have been working on GDPR compliance for CRM. For example, Super Office has launched CRM software's such as privacy by design, privacy lifecycle data management, and managing personal data with CRM to support the customers towards GDPR compliance. In February 2019, Compass acquired Contractually, Inc. for an undisclosed amount. The transaction is expected to assist Compass from the technology and team behind Contact ally's industry-leading CRM platform which boosts the improvement and adoption of Compass CRM. Compass CRM is a CRM software developed to increase sales by offering useful insights and unified view of agent's pipeline and outreach. Contactually, Inc. is a software company involved in the development and distribution of CRM software and contact management solutions. The company was established in 2011 and is headquartered in Washington, DC, United States. Major players in the market are Salesforce, Microsoft, Oracle, SAP and SugarCRM.

The supply chain management (SCM) software market consists of sales of supply chain management software. The SCM software manages the flow of products and information across the supply chain, thereby strengthening the supply chain operations in an organization. Softwares such as SCMs are used to bring equilibrium between supply and demand by improving business processes and plan the future needs by using algorithms which provides consumption analysis. The global SCM software market was valued at about $7.3 billion in 2018 and is expected to grow to $10.57 billion at a CAGR of 9.7% through 2022. The SCM Software market has been geographically segmented into North America, Western Europe, Asia-Pacific, Eastern Europe, South America and Middle East & Africa. The North American market is the largest market for SCM Software and is expected to continue to be the largest market during the forecast period. SCM software’s can manage the complexities of the modern day supply chain. With businesses going global and increased competition, the supply chains are getting complex. The number of suppliers, orders received/completed, variety of product offerings, information generated etc. all have increased substantially. Through the use of SCM software, the complexity can be reduced along with cost and resource savings. The need for companies to remain relevant in the market amidst the highly competitive conditions is a crucial driver for the growth of the SCM software market. Home Depot, one of the biggest retailers selling home improvement and construction products and services used to have separate logistics management departments in every single physical store to utilize replenishment and store management-related activities. This was costly as each store had to process the replenishment orders to get the required materials from the suppliers separately. After realizing that the de-centralization of the logistics management was a major issue, Home Depot decided to centralize those individual departments into one department in its corporate headquarters. With the help of technology and right SCM software solutions, Home Depot’s new centralized inventory and replenishment department’s overall performance improved the demand forecast accuracy and decreased the cost of operations for the replenishment orders. Supply chains are continuously evolving with data at the center of every stage in the value chain. With a huge amount of data generated, there is an enormous challenge in the form of data and IT security risks. Protecting the privacy and still sharing data across the supply chain is a major challenge which could become a roadblock for the SCM software industry. The 2014 Target breach was caused by lax security at an HVAC vendor wherein personal information of as many as 70 million people was compromised. The information stolen included customer names, credit or debit card number, the card’s expiration date and CVV number. The General Data Protection Regulation (GDPR) 2016/679 is a regulation in EU law on data protection and privacy for all the individuals within the European Union and the European Economic Area. It also addresses the export of personal data outside the EU and EEA areas. It was implemented on 25th May, 2018 and replaces the Data protection Directive. For now, protecting internal data while still sharing product and consumer information with partners across distributed supply chains is a challenge that comes up with the GDPR regulation. Major players in the market are SAP, Oracle, JDA Software Group, Inc., Infor Global Solutions and, Manhattan Associates.