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Software Market ResearchMethodology and Definitions,2003-2004

Gartner Dataquest Guide

Publication Date: 16 January 2004


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2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Publication Date: 16 January 2004

Software Market ResearchMethodology and Definitions,2003-2004

Gartner Dataquest Guide


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Authors Colleen Graham

Nicole Latimer

Fabrizio Biscotti

Joanne Correia

Chad Eschinger

Chris PangThomas Topolinski

This document has been published to the following Cluster codes:

SOFT-WW-GU-0011

For More Information...In North America and Latin America: +1-203-316-1111In Europe, the Middle East and Africa: +44 1784 267770In Asia/Pacific: +61-7-3405-2582In Japan: +81-3-3481-3670Worldwide via gartner.com: www.gartner.com

Entire contents 2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction of this publication in any form

without prior written permission is forbidden. The information contained herein has been obtained from sources believed to

be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall

have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The

reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed

herein are subject to change without notice. 119016


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2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. iii

Table of ContentsPage

1. Market Share and Forecast: Overview and Methodology .......................................................................... 1Market Share and Forecast Overview ....................................................................................................... 1Market Share Methodology ........................................................................................................................ 2Research Process ........................................................................................................................................... 4Forecasting Methodology............................................................................................................................ 5

2. Software Revenue Components and Licensing Models.............................................................................. 7Software License Revenue Recognition .................................................................................................... 7Understanding Components of Recognized Revenue............................................................................ 7Abstract Components vs. Real World Complexity.................................................................................. 8Types of Software Licenses.......................................................................................................................... 9

3. Software Segmentation .................................................................................................................................. 13Product Market Definitions....................................................................................................................... 13Composite and Stand-Alone Views......................................................................................................... 13

Stand-Alone and Composite Views..................................................................................................... 144. Infrastructure Software Definitions.............................................................................................................. 15

AD Software ................................................................................................................................................ 15

Requirements Management.................................................................................................................. 15Business Process Analysis ..................................................................................................................... 15Database Design (Data Modeling)....................................................................................................... 15Object-Oriented Analysis and Design................................................................................................. 15Language-Oriented Development Environments ............................................................................. 16Integrated Services Environments ....................................................................................................... 16Traditional (Client/Server) AD Tools.................................................................................................. 16Business Rules Engine ........................................................................................................................... 16Business Process Management ............................................................................................................. 17Automated Testing (Distributed and Mainframe) ............................................................................ 17Software Change and Configuration Management .......................................................................... 17

Other AD Software................................................................................................................................. 17Application Integration and Middleware............................................................................................... 17

Adapter Suite .......................................................................................................................................... 18Application Platform Suite ................................................................................................................... 18Application Servers................................................................................................................................ 19Business Process Management ............................................................................................................. 19Integration Suites ................................................................................................................................... 19Message-Oriented Middleware............................................................................................................ 19Object-Request Brokers ......................................................................................................................... 20Enterprise Portal Server ........................................................................................................................ 20Transaction Processing Monitors ......................................................................................................... 20

Other Middleware.................................................................................................................................. 20BI Tools ......................................................................................................................................................... 21

BI Platforms............................................................................................................................................. 21Enterprise Business Intelligence Suite................................................................................................. 21

Collaboration Software and Knowledge Management Tools .............................................................. 21E-Mail and Calendaring ........................................................................................................................ 21Real-Time Collaboration ....................................................................................................................... 22Team Support.......................................................................................................................................... 22

Data Warehouse Tools................................................................................................................................ 22Data Mining Tools .................................................................................................................................. 22Data Quality Tools.................................................................................................................................. 22

Extraction, Transformation and Loading Tools ................................................................................. 22Database Management Systems ............................................................................................................... 22

Pre-relational DBMS .............................................................................................................................. 22


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iv Software Market Research Methodology and Definitions, 2003-2004

2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 16 January 2004

Table of Contents (Continued)Page

Relational DBMS.................................................................................................................................... 23Embedded DBMS .................................................................................................................................. 23Mobile Embedded DBMS..................................................................................................................... 23

Desktop DBMS Products ...................................................................................................................... 23Object-Oriented DBMS ......................................................................................................................... 23

Embedded Software Tools ........................................................................................................................ 23Network and Systems Management Software ...................................................................................... 23

DBMS Management .............................................................................................................................. 23Application Management ..................................................................................................................... 24Availability and Performance, Other NSM........................................................................................ 24Network Management .......................................................................................................................... 25Configuration Management................................................................................................................. 25IT Service Desk....................................................................................................................................... 25Asset Management ................................................................................................................................ 26

Job Scheduling........................................................................................................................................ 26Output Management ............................................................................................................................. 26

Security Software ....................................................................................................................................... 26Antivirus ................................................................................................................................................. 27Content Filtering .................................................................................................................................... 27Network Security ................................................................................................................................... 27Intrusion Detection................................................................................................................................ 27Encryption .............................................................................................................................................. 28Security Event and Performance Management................................................................................. 28Security Administration Software....................................................................................................... 28

Storage Management ................................................................................................................................. 29

5. Enterprise Application Software Definitions ............................................................................................. 31Customer Relationship Management ..................................................................................................... 31

Sales ......................................................................................................................................................... 31Marketing................................................................................................................................................ 32Customer Service and Support............................................................................................................ 32

Enterprise Resource Planning .................................................................................................................. 33Manufacturing ....................................................................................................................................... 33Human Capital Management .............................................................................................................. 33Financial Management Systems .......................................................................................................... 34Computer(ized) Maintenance Management System........................................................................ 35Enterprise Asset Management............................................................................................................. 35

Supply Chain Management ...................................................................................................................... 36Supply Chain Planning......................................................................................................................... 36Supply Chain Execution ....................................................................................................................... 36Warehouse Management Systems....................................................................................................... 36Transportation Management Systems ................................................................................................ 36International Trade Systems/Global Trade Management ............................................................... 37Sourcing and Procurement................................................................................................................... 37

Project Portfolio Management.................................................................................................................. 38Design and Engineering............................................................................................................................ 39

6. Emerging and Merging Markets .................................................................................................................. 41Composite Markets.................................................................................................................................... 41

Business Activity Monitoring................................................................................................................... 41Collaborative Commerce .......................................................................................................................... 41Corporate Performance Management..................................................................................................... 41Contract Management ............................................................................................................................... 42


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vi Software Market Research Methodology and Definitions, 2003-2004


List of FiguresFigure Page

1-1 Software Segmentation Structure.......................................................................................................... 2

1-2 Infrastructure Software Segmentation Structure ................................................................................ 3

1-3 Applications Software Segmentation Structure .................................................................................. 4

List of TablesTable Page

2-1 License Type Matrix .............................................................................................................................. 10

2-2 Software Revenue Components Broken Down by Software Business Model.............................. 11

11-1 Prevailing Annual Exchange Rates, 2000-2002.................................................................................. 53

12-1 Vertical Market Segmentation.............................................................................................................. 55

12-2 Company Size Segments ...................................................................................................................... 57

A-1 Report Glossary ..................................................................................................................................... 61


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vii Software Market Research Methodology and Definitions, 2003-2004



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2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 1

Chapter 1Market Share and Forecast: Overview andMethodology

Market Share and Forecast OverviewGartner Dataquest's software industry research covers key areas of the enter-prise infrastructure and application software markets worldwide. Our researchprograms include Infrastructure Software Worldwide (SWSI-WW), Applica-tions Software Worldwide (SWSA-WW) and regional research programs, suchas Software Europe (SWSF-EU) and Software Applications Asia/Pacific(SWSF-AP).

While some research encompasses the entire software industry, the majority ofresearch is done at the segment level. Gartner Dataquest breaks the softwareindustry into logical segments, which allows for in-depth and segment-specificresearch. The segments for which software revenue is analyzed are comprehen-

sively defined in Chapter 4 and Chapter 5 for the purpose of providing clarityand guidance to survey participants and those that use Gartner Dataquest'sresearch. These definitions are revised, altered or expanded each year to reflectchanges in software technologies and the software marketplace. Data is notcollected or published for every product category defined in this document.Some subsegment details are included for clarification only.

Within each of these segments, research documents produced will includesome, or all, of the following:

Vendor Market Share

Market Forecasts

Market Trends

Research Briefs

User Wants and Needs

Of these reports, the two foundational documents are the Vendor Market Shareand Market Forecasts.

To produce market share reports, Gartner Dataquest collects, estimates andclassifies vendors' software revenue in terms of license, updates, technicalsupport and other services that is, the revenue received by the vendor, asopposed to the price paid by the end buyer of the software. Our research coverssoftware vendors worldwide by selected software categories, as defined in thisguide. Based on this research, Gartner Dataquest develops and maintains adatabase of information on software supply by vendor, revenue, region andsoftware segments. In addition, Gartner Dataquest also analyzes segment andvendor revenue by platform, vertical industry, enterprise size and sales chan-nels (direct, indirect and others) for most of the markets.

Our surveys cover about 800 enterprise software vendors active in one or moreof the following product segments: application development (AD) software,application integration and middleware (AIM), database management systems(DBMS), business intelligence (BI) and data warehousing tools, network andsystems management (NSM) software, customer relationship management(CRM) software, project portfolio management (PPM) software, enterprise

resource planning (ERP) software, supply chain management (SCM) software,and collaborative and knowledge management tools. Figure 1-1, Figure 1-2and Figure 1-3 outline the relative structure of these segments and theirsubsegments.


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2 Software Market Research Methodology and Definitions, 2003-2004


Market Share Methodology

Gartner Dataquest's vendor market share methodology combines primary andsecondary sources to produce the Gartner Dataquest Market Statistics reports.Gartner Dataquest interviews all major vendors in covered product categories

within the software industry in the following regions: Asia/Pacific, Europe,Japan, Latin America, Middle East and Africa, and North America. This pri-mary research is supplemented with additional research to verify market size.Sources of data used by Gartner Dataquest include, but are not limited to:

Interviews with the channel including manufacturers, distributors andresellers

Information published by major industry participants

Estimates made by reliable industry spokespersons

Government or trade association data

Published product literature and price lists

Relevant economic data

Articles in the general and trade press

Published company financial reports

Reports from financial analysts

Information and data from online and CD-ROM data banks

Demand-side (end-user) surveys

Particularly significant sources of information are those published by vendorsto the Securities and Exchange Commission (SEC) and other non-U.S. govern-

ment agencies. The data is used by Gartner Dataquest to prevent "doublecounting" revenue in more than one segment. Information filed with the SECand other government agencies is used to cross-reference analyst estimates andis the final check as separate segment and market estimates are rolled-up. Formore information on this process, see the "Research Process" section below.

Figure 1-1Software Segmentation Structure

Source: Gartner Dataquest (December 2003)

119016-01-01

AD

AIM

BI Tools

Collaboration Software and Knowledge Management Tools

DBMS

Data Warehouse Tools

NSM Software

Security Software

CRM

ERP

SCM

PPM

Software Segmentation

Infrastructure Software Enterprise Application Software


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Market Share and Forecast: Overview and Methodology 3


Figure 1-2Infrastructure Software Segmentation Structure


119016-01-02

Adapter Suites

APS

Application Servers

Integration Suites

MOM

ORB

Enterprise Portal Server

TPM

Other Middleware

BI Platforms

EBIS

Other BI Software

Pre-relational DBMS

Relational DBMS

OODBMS

Embedded DBMS

Mobile Embedded DBMS

Desktop EBMS Products

OODBMS

DBMS Management

Application Management

Availability & Performance

Network Management

Configuration Management

Job Scheduling

Output Management

ITSD

Asset Management

Other NSM

Infrastructure Software

Application Development Application Integration and Middleware

Database Management Systems

Business Intelligence Tools

Network and Systems Management

Software

Email & Calenaring

Real Time Collaboration

Team Support

Collaboration Software and Knowledge

Management Tools

Data Mining Tools

Data Quality Tools

ETL Tools


Antivirus

Content Filtering

Network Security

Intrusion Detection

Encryption

Security Event and Performance

Management

Security Administration Software

Security Software

Requirements Management

BPA

Database Design (AKA Data Modeling)

OOA&D

Language-oriented Development Environments

ISE

Traditional (Client/server) AD Tools

BRE

BPM

Automated Testing (Distributed and Mainframe)

SCCM

Other AD Sosftware


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Gartner Dataquest believes its market share data is the most accurate andmeaningful available. Despite the care taken in gathering, analyzing andcategorizing the data, careful attention must be paid to the definitions andassumptions, as various companies, government agencies and trade associa-tions may use slightly different definitions of product categories and regionalgroupings, or they may include different companies in their summaries. Thesedifferences should be kept in mind when making comparisons between dataand numbers provided by Gartner Dataquest and those provided by other

research organizations.

Research Process

At least annually, the Gartner Dataquest software analysts review the lists ofvendors and the software segments that will be researched. This review allowsfor new vendors to be added, defunct vendors to be removed, and any adjust-ments that need to be made for mergers and acquisitions. The same is true forthe software product categories as emerging software segments can be addedor outdated segments can removed from the research agendas.

A company model is updated for all vendors, large or small, but it is most

critical for large vendors that participate in multiple software sectors (such asMicrosoft) or multiple industries (such as IBM). The company model dividesthe revenue that the vendor reports to the SEC (or non-U.S. government agen-cies) into manageable and logical segments, usually by division or business

Figure 1-3Applications Software Segmentation Structure


119016-01-03

Sales

Marketing

Customer Service and Support

Manufacturing

HCM

FMS

EAM

CMMS

Enterprise Application Software Segmentation

Customer Relationship Management Enterprise Resource Planning

SCP

SCE

WMS

Transportation Management Systems

International Trade Systems/Global Trade

Management

Sourcing and Procurement

Supply Chain Management Project Portfol io Management


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Market Share and Forecast: Overview and Methodology 5


unit. Then, the business unit revenue estimate is further broken down to theproduct level in collaboration with multiple analysts as necessary.

By creating a single company model, the Gartner Dataquest software analystsensure that no double-counting of revenue occurs. All analysts' detailed esti-mates of product, service, maintenance and other revenue must add up to thesame revenue number that the vendor files with the SEC or other non-U.S.government agencies.

While estimating vendors' product-level new license revenue, software ana-lysts use the means outlined in the "Methodology" section above to cross-checkand verify that their estimates are as accurate and reflective of market activitiesas possible. Once product-level new license revenue has been estimated, thedata undergoes a series of reviews and revisions with other Gartner Dataquestanalysts covering the market. Once consensus has been reached, the data ispublished.

Gartner has a long history of providing end-user clients with independentresearch on products, vendors and technology trends. Vendor-share measures

provide some partial, but interesting, insights into the health and viability ofparticular software vendors. However, end-users should realize that vendorshare is not the complete story, as other factors also contribute to a vendor'sviability. End users should base their vendor selections on a range of criteria,including the requirements of the applications they are running, and the sizeand growth of the vendor's installed base, as well as the vendor's innovation,research and development, scalability, third-party software support, and exe-cution. If you are selecting a vendor and a product, you should also consult therelevant Gartner Magic Quadrant and Gartner Datapro product notes.

Forecasting Methodology

In general, Gartner Dataquest forecasts are developed in accordance with amulti-step methodology. This methodology prescribes a highly structuredapproach to forecasting that involves three broad process steps. In the first step,the latest available market data is carefully reviewed and compared to the mostrecently completed forecast. The methodology then directs the formulation ofassumptions about the future with consideration given to factors that couldcause the forecast to stray in one direction or the other and to potential marketdiscontinuities. On this score, the methodology commands forecasters to con-sider the complete range of influences that can affect a forecast, including rela-tionships with the rest of the IT industry, general macroeconomic conditionsand exchange rate fluctuations. Finally, the methodology dictates an iterativeapproach to a final forecast in which successive preliminary forecasts arereviewed, critiqued and revised by all those involved in the forecast process in

Gartner's analyst community. An integral part of this final step involves com-paring forecasts in one sector to those in related markets up or down the valuechain and across the entire software industry.

Gartner Dataquest's structured methodology leaves specific issues of techniqueopen to forecaster discretion. In general, Gartner Dataquest uses a variety offorecasting techniques in its forecast efforts, depending on the product or tech-nology being forecast. Experience has shown that sole reliance on statisticaltechniques tends to produce inferior forecasts. Consequently, we use a mix ofquantitative statistical and qualitative judgmental methods to generate fore-casts. All-in-all, statistical techniques are heavily used in the early parts of ourprocess to anchor our preliminary forecasts in historical fact. Judgmental tech-

niques are then used to shape the final forecast according to the consensual feelof analysts, and are based on information gathered during research with endusers, such as User Wants and Needs surveys, CIO surveys and other mecha-nisms that provide qualitative information on the state of the market.


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Gartner Dataquest aims to provide clients with forecasts that are useful, credi-ble and as accurate as possible. Because it is impossible to be 100 percentaccurate, it is important to provide clients with details of the assumptions thatdrive the forecast.

For several years, the process of developing IT market forecasts has beenundergoing continued refinement at Gartner Dataquest. Today, the processdraws on Gartner Dataquest industry experts and client feedback to devise aforecast that is consistent internally and meets client expectations. The processassimilates vast amounts of disparate and aggregated data that are molded intoa forecast that is scrutinized and scrubbed by many seasoned analysts. Fore-casts are reviewed quarterly to ensure they reflect current analyst opinion. Thequarterly analysis of a sample of key vendors is used to fine-tune the forecast, ifnecessary.


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Chapter 2Software Revenue Components and LicensingModels

Software License Revenue RecognitionCompared with 10 years ago, today's software vendors offer a much widervariety of contract terms and conditions, pricing models, billing and paymentmodels. And the pace of contract innovation only seems to be escalating.Sometimes, it is the customers that are demanding variations from a "standard"contract. Other times, it is the vendor that is adjusting the terms and conditionsto make the customer "sticky" or to smooth the vendor's revenue recognition onits income statement.

Gartner Dataquest anchors our published vendor revenue estimates for pub-licly traded companies to the revenue numbers reported in the vendor's SECfilings, or the international equivalent. We assume that the vendors are

following generally accepted accounting principles (GAAP) and FinancialAccounting Standards Board (FASB) guidelines for how and when to recognizesoftware contract revenue. In general, if a software vendor contract containscontingencies, all or part of the revenue must be deferred until the contingen-cies are removed and "delivery" is thereby completed.

The effect of contracts that require or permit revenue deferral is that, in anyparticular quarter, the software vendor's revenue will typically be made up ofrevenue from current quarter sales closing activity, but also from previousquarters' activity. For example, the value of a newly closed maintenance con-tract is always posted as an asset to the balance sheet and later recognized asrevenue on the income statement over many quarters. Depending on the termsand conditions of a particular contract, software license revenue might be rec-

ognized over many quarters as well, rather than in the quarter the sales activitywas closed. Software license contracts, popularly called any of the following term, lease, rental, subscription may result in gradual recognition of soft-ware license revenue by the vendor, rather than a big lump in a single quarter.

Understanding Components of Recognized Revenue

Gartner Dataquest identifies four main components of software companyrecognized revenue:

Product new license revenue

Product update license revenue

Technical support revenue

Services/training/consulting revenue

And optionally, a fifth:

Hardware revenue

Product new license revenue is the only metric tracked by Gartner Dataquestsoftware analysts and the one on which estimates of software vendor marketshare and market size are based. Gartner Dataquest considers the best methodto quickly identify shifts in technology trends in the software market is throughobserving changes in measures of new license revenue. Changes in vendor new

license revenue shows trends faster than changes in total company revenuebecause new license revenue clearly reveals which product categories are accel-erating and which are declining.


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Looking only at total revenue can mask a steep descent in demand in a cate-gory because total revenue includes revenue from updates and upgrades,which is revenue from sales activity that occurred long ago. Updates do nottrack to what customers are buying new in current quarters. Therefore, newlicense revenue is much better for revealing important inflection points. It'sbetter to use a leading indicator rather than a lagging one.

New license revenue New license revenue is the initial fee charged by avendor to use a given version of a software product. New licenses caninclude first-time use of the software by a customer, as well as the adoptionof new modules by a customer or the addition of new seats, new processorsor more million instructions per second (MIPS). This is the software com-pany revenue component tracked by Gartner Dataquest software industryanalysts and the basis of software market vendor share and market sizereports.

Upgrade revenue Upgrade revenue is revenue from customers that pur-chase a special product license that expands the established license to covermore users, CPUs, storage or other product license metrics. Licenseupgrades are sometimes offered to allow a user to license a package thatincludes multiple components, one of which the customer already owns.Gartner Dataquest recognizes upgrade licenses as product license revenue.

Update revenue Software is licensed for a specific product version at timeof purchase. Update revenue is a fee paid to allow the user to update theirlicense to allow the use of a new version. Customers can purchase updatelicenses as new versions become available (a common approach for PC soft-ware) but enterprises usually contract for an annual service that includedsthe right to install all new version of the product released during the contractperiod. The fee is usually a percentage of the initial purchase price of thesoftware (see "new license revenue" above). New versions of the productmay or may not become available during any given contract period. In gen-

eral, an update contract includes the right to receive both the minor "dot"versions, for example, from version 7.2 to 7.3, as well as the right to receivemajor upgrades, for example, from 7.5 to 8.0. Gartner Dataquest recognizesall update license revenue, whether received as part of a service contract oras a separate update license as service revenue.

Technical support revenue Technical support revenue is typically anannual fee, usually based on the percentage of the initial purchase price ofthe software (see "new license revenue" above) charged by a vendor for tech-nical support of the software product purchased. Technical support caninclude phone support as well as Web-based support, but does not usuallyinclude physical, on-site support.

Training, consulting and other services revenue Training, consulting and

other services revenue may be a one-time charge or a contract, which will berecognized over time.

Abstract Components vs. Real World Complexity

If only the real world were as neat and tidy as the conceptual world. Unfortu-nately, updates are not always sold in contracts as described above. Manyvendors selling PC software have historically sold updates on a one-off basis,especially in the consumer and small office/home office (SOHO) segments.Only recently has Microsoft begun to offer "right to update" contracts, such asSoftware Assurance to enterprise-class customers. Siebel has always offeredright-to-update contracts, but the updates covered are only the minor dot ver-

sions. When a current Siebel customer wants to move to a major update, thatmust be negotiated as if it were a new product, and Siebel accounts for it as anew license sale.


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Software Revenue Components and Licensing Models 9


The SEC and FASB have a lot to say about when elements of contracts for soft-ware products and services revenue can or must be recognized on the incomestatement as revenue. However, these regulatory bodies do not require thatpublic companies decompose revenue into line items, such as license, mainte-nance, consulting and others.

Software vendors that do choose to decompose their revenue for public report-ing purposes do not use consistent terminology among themselves. Terms suchas product, license, new license, update license, maintenance, technical supportand services are used differently by different vendors in publicly filed reports.Regulatory authorities do not dictate what words, such as license, maintenance,updates, support and others, mean in a public report. In fact, these words areused at the vendor's discretion. The vendor decides how to describe its busi-ness to its investor community and how much it wants to disclose withoutgiving competitors an edge. Practice varies widely, as stockholders seem inef-fective in demanding greater visibility into financial reporting.

Types of Software Licenses

Gartner Dataquest identifies and defines the following software licensingmodels:

Perpetual license

Term license

Subscription license

Appliance license

The two key differences between these models are whether updates or techni-cal support is included with the software license and the length of time beforethe vendor is contractually able to charge the customer for another license.

Perpetual license A perpetual license is when, once the customer pays theinitial fee for the new license, they have the right to use that software inperpetuity. However, this does not give the customer the right to updateswithout an additional fee. For that, they must sign an update contract (orbuy the update one-off, if available that way). This is the type of license mostpreferred by users and apparently by many vendors, as it makes up over90 percent of the software licenses sold.

Term license A term license is when, once the customer pays the initial feefor the new license, they have the right to use that software for a contractu-ally established term. Often, the fee is paid in a lump sum upfront. Once thatterm is over, the customer must again pay an initial fee for a new termlicense. Prices probably will have changed. The customer also generally hasa maintenance contract of the same duration as the term license contract.Gartner Dataquest always clarifies in the vendor interview process whetherupdates are included directly in the term license. (If they are, this vendor isactually using a subscription license model as defined by GartnerDataquest.) True term license revenue (not including updates) is counted byGartner Dataquest as new license revenue. (Some vendors call their termlicenses "lease licenses" or "rental license.")

Subscription license A subscription license is when, once the customerpays the initial fee and signs the contract for the new license, it has the rightto use the software developed by the vendor for a contractually specifiedtime, as in a term license. Unlike in a term license, as defined by Gartner

Dataquest, the customer also has the right to subsequent updated versions ofthe software as well as a certain amount of technical support. If a vendorclaims to be using a subscription license model, the analyst must research


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that vendor's contract practices to discover if it's definition of "subscriptionlicense" matches Gartner Dataquest's software subscription definition.

Gartner Dataquest identifies and defines two types of subscription license:

The customer buys and runs the subscription in-house

The customer buys the subscription that is hosted by the same softwarevendor. Some examples are sales force.com in CRM, SupportSoft in helpdesk and Opsware (formerly Loudcloud) in systems management.

Appliance license An appliance license is where a software program issold on a hardware device branded by the same vendor. The software is soldas a package of hardware and software. Sometimes, the software is availableas only software, but most commonly the software is available only on thevendor's appliance, board or blade, not for installation on a general-purposecomputer, or the software works fully only in conjunction with the purchaseof the hardware. In some cases, the appliance or board may contain customhardware components, but in other cases, may be quite generic. Examplesinclude the firewall market, where end-buyers consider software-only solu-tions, such as Checkpoint, alongside appliance solutions, such as NetScreen.In the network management market, NetScout Systems embeds its agents inprobes (boards), whereas Hewlett-Packard agents are software-only. WhenGartner Dataquest reports on such a software market, the imputed value ofappliance and board hardware is excluded.

Table 2-1 details the different types of software licenses.

If vendors do not provide revenue line-item information that breaks softwarerevenue into its various components, Gartner Dataquest uses the followingmatrix of the ratios used for each licensing business model to attribute revenueto Gartner Dataquest's concepts of software revenue components (seeTable 2-2).

If the vendor's licensing model, managerial accounting and investor reporting

practices do not match up to Gartner Dataquest's definitions, then additionaladjustments may need to be made to estimate the Gartner Dataquest newlicense revenue, update revenue, technical support revenue and others.

To better serve clients, Gartner Dataquest is constantly seeking to provide thebest and most current software industry analysis possible. As vendors modifyand evolve licensing and pricing models to achieve a competitive edge, GartnerDataquest reviews and revises it's models and rules to keep up with industrypractices.

Table 2-1License Type Matrix

Gartner Dataquest Concept Length of Term Includes Updates

Perpetual License Forever No

Term License Term NoSubscription License Term Yes

Appliance License Forever Varies



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Chapter 3Software Segmentation

Product Market Definitions

The software market segments covered contain a wide variety of products and

technologies. To better understand the range of vendors and products includedin this program, this document provides a taxonomy for the market and defini-tions of the specific segments. Note that the inclusion of a segment in this listdoes not indicate the level of coverage (if any) committed to it.

The segmentation of software infrastructure products and application packagesposes significant challenges, including:

Products are very often used in ways that differ from their intended purpose.

The positioning of a product by a vendor may not match the actual function-ality of the product.

Product sets and suites are evolving and devolving. Products are, therefore,moving across segment boundaries, and new segments must be created andold segments must be revised.

In many markets, the lines between segments are blurring.

Important attributes, which may be of interest in their own right, do notnecessarily constitute a unique market.

Gartner Dataquest segments products into mutually exclusive groups tominimize the double-counting of vendor revenue. Chapter 6 provides detailsof emerging software market opportunities which don't fit the standard catego-ries listed in Chapter 4 and Chapter 5.

Gartner Dataquest's classification of a product takes into account a variety offactors, including the product's technical features, target audience, competitivepositioning and perceived usage of the product by customers.

Wherever possible, Gartner Dataquest intends to position a product within onespecific segment. However, in cases where the vendor and Gartner Dataquestsee the product being used in multiple segments, percentages of the total newlicense revenue will be allocated to the appropriate segments, to avoid double-counting.

Composite and Stand-Alone Views

In general, to produce the market share and forecast for a specific softwaremarket, the Gartner Dataquest software group counts new license revenue ofappropriate stand-alone products and does not attempt any estimate or adjust-ment to count revenue from functionality embedded within software productsthat are not part of the specific software market being studied. However, inseveral software markets, a shift is occurring as increasing numbers of vendorsare producing software that fits into one segment but selling it as additionalfunctionality embedded in products sold in another segment. An example ofthis would be SAP's Business Warehouse (SAP BW), which is sold as a separateproduct and as a bundle in the mySAP application suite. SAP BW, sold as aseparate product, is the only SAP revenue counted in the stand-alone view ofthe BI market. However, when sizing the composite view of the BI market, weformulate an estimate of the revenue that SAP generates for the entire SAP BW

solution, including when it is sold as part of the mySAP application suite. This,then, is SAP's revenue in the composite view of the BI market.


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Chapter 4Infrastructure Software Definitions

The focus of infrastructure software is to increase the performance of ITresources. In this category, we gather software primarily for use by IT profes-sionals. These definitions are how Gartner Dataquest views the market as of

August 2003.

AD Software

The AD software market is comprised of tools that represent each phase of thesoftware development life cycle (planning, design, construction, automatedsoftware quality and operation life cycle).

Requirements ManagementRequirements management tools streamline development teams' analysis ofrequirements, captures requirements in a database-based tool to enable collab-orative review for completeness, ease use-case or test-case creation, provides

traceability and facilitates documentation and versioning/change control. Thedatabase approach uses special-purpose repositories that are part of therequirements management solution or ship with a general-purpose commercialdatabase integrated with the tool.

Business Process AnalysisThe fundamental analysis of business processes and management systems is toimprove them for cost reductions, faster time-to-market, lowered risk or higherbusiness value. Business process analysis (BPA) can point out opportunities foroptimization, automating manual processes, reducing error cycles and identi-fying revenue leakage points. It uses objective, quantitative methods and toolsto analyze, redesign and transform business processes, including supporting

organization structures, information systems, job responsibilities and perfor-mance standards. In some cases, BPA could point out the need for wholesalechange implied in a full business process re-engineering (BPR) effort.

Database Design (Data Modeling)Database design software includes logical (entity relationship) and physical(table, column and key) design tools for data. Physical data modeling isbecoming almost mandatory for applications using relational database man-agement systems (RDBMS). Strong support for physical modeling is pairedwith facilities to manage multiple models, to sub-model or extract from largermodels and to reverse-engineer a database design from established tables.Developers are a secondary market, often targeted with a subset of the com-

plete functionality.

Object-Oriented Analysis and DesignObject-oriented analysis and design (OOA&D) tools support object analysisand design technologies, and they commonly use Unified Modeling Language(UML) notation with a variety of methodologies to assist in the creation ofhighly modular and reusable software. Applications, data, networks and com-puting systems are treated as objects that can be mixed and matched flexiblyrather than as components of a system with built-in relationships. As a result,an application need not be tied to a specific system or data to a specific applica-tion. (The UML standard from the Object Management Group has become thedefacto standard for OOA&D tools).


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Language-Oriented Development EnvironmentsLanguage-oriented development environments typically are built around acompiler and a language, such as COBOL, C/C++, Fortran, ADA andPASCAL, among others. These tools generally include graphical user interface(GUI) builders, debuggers, editors and other utilities that are integrated intothe environment.

Integrated Services EnvironmentsAn integrated services environment (ISE) is a suite of integrated developmenttools, frameworks and technologies used for building service-oriented andcomposite applications. Most often, these applications will implement aservice-oriented architecture (SOA) and will use the techniques of services-oriented development of applications (SODA) [see "Producer Platforms andSODA Will Shift the AD Approach," T-16-5731]. ISEs are producer platforms(for creating services), much as application servers are provider platforms (forhosting services). Seven basic characteristics of an ISE define the completenessof its support for SODA:

Design Specification of application requirements Modeling Definition of application structure

Fabrication Writing code, creating components and wrapping legacyresources. Nominally, this is the function of an integrated development envi-ronment (IDE).

Assembly Aggregation of components, alignment of inputs to outputs,translation of input or output data

Orchestration Flow control and process management

Automation Hiding complexity and removing the need to write code

Variability Rapid change management. The variability of a system may beinversely proportional to its automation.

Traditional (Client/Server) AD ToolsTraditional AD tools include all traditional client/server development environ-ments, and may be client/server fourth-generation languages (4GLs) targetingolder technologies (that is, VisualBasic targeting the Microsoft COM/DCOMenvironment) and third-generation language (3GL) generators for Cobol, C orC++ targeting the Multiple Virtual System (MVS) or Unix.

Business Rules EngineBusiness rule engine (BRE) business change has been a constant companion

of systems development since the inception of IT, but a growing number offactors has led to the increase of change necessary to remain competitive inbusiness. This increase in the frequency of change is leading to new approachesto alter the business rules embedded in business process flows, applicationsand even in the enterprise architecture. Enterprises are more pressed to becomeadaptable and apply the knowledge captured in rule sets to outflank competi-tors and respond to changing business environments. They can no longer waitfor professional programmers to change applications written in traditionalprogramming languages. Business users want to change rules without goingthrough a long-running change process that is, at best, measured in days and,at worst, measured in weeks and months. Therefore, rules engines allow evenend users to make dynamic "real time" changes to their applications in an

abstracted level of language.


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Infrastructure Software Definitions 17


Business Process ManagementBusiness process management (BPM) is a general term describing a set of ser-vices and tools that provide for explicit process management (that is, processanalysis, definition, execution, monitoring and administration), including sup-port for human and application-level interaction. BPM has emerged from manysources workflow, applications, collaborative tools, integration brokers,

Web integration servers, application servers, development tools, rules enginesand commerce offerings. BPM leverages tools to analyze and model processes,using a graphical process designer targeted for business analysts that extractprocess flow and architect new business process flows. A runtime executionengine (underlying state machine) executes the defined process flow, steppingthrough the defined process flow. As the process flow is executed, applications(that is, legacy, packaged, external business-to-business [B2B] and Webservices) may be invoked, as will tasks that humans have to complete. Theruntime environment maintains the status (state) of each process instance. Asthe many instances of multiple process types execute, they can be monitored(that is, process performance, degree of completion and out-of-bounds condi-tions) and administered (that is, for process termination and load balancing orrerouting). Post-completion analysis is also possible, as the state data isarchived for BI potential.

Automated Testing (Distributed and Mainframe)Automated testing applies commercially or internally developed software orservices to assist in the testing process. Automated tests provide consistentresults and data points. The benefits are repeatability, ease of maintenance, theability to efficiently use resources in off-peak hours and the capability to createreports based on the executed tests.

Software Change and Configuration ManagementSoftware change and configuration management (SCCM) is a set of disciplines

to stabilize, track and control an agreed to set of software items. It includesversion management, change management, defect tracking, change automationand other related processes.

Other AD SoftwareOther categories of AD software, not directly covered in the market research,include:

Methodware

Process management tools

Component-based development tools

Legacy understanding, legacy extension and legacy transformation tools

IT metadata repositories

Application Integration and Middleware

AIM is defined as the system software or runtime infrastructure used toprovide intra- and inter-application communications. Intra-application middle-ware is used for the construction of individual multitiered applications.Inter-application middleware is used for communication between individuallydesigned applications.

Gartner Dataquest includes all runtime platforms, such as application servers,transaction processing monitors (TPMs), object request brokers (ORBs) andobject transaction monitors (OTMs), as middleware, making our definitionbroader than other popular definitions. Elsewhere, middleware is sometimes


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limited to program-to-program communications services, such as message-oriented middleware (MOM) and remote procedure calls (RPCs) (communica-tion middleware). A definition that only includes communications middlewareis too narrow. Many other types of software "sit in the middle" (between theapplication, the operating system and the network), acting as glue. It is good tohave one general term (middleware) rather than multiple terms for each formof such software. Note also that application servers, TPMs, ORBs and OTMs(what we call platform middleware) do the same thing that MOM and RPCsdo. That is, they send messages between programs, although they also do otherthings, such as managing system resources, the operating system and networktransport service. In the IT marketplace, AIM is often referred to as enterpriseapplication integration (EAI).

Adapter SuiteAdapters are some combination of design tools and runtime software that actas glue to link applications, considered as sources or targets (or both), to theenterprise nervous system (ENS), that is, the integration middleware infra-structure that transports, transforms and routes data between systems. Anadapter deals with a group of touchpoints (one or more entry/exit points, col-lectively an "interface") for a source or target. On the other hand, an adapterlinks to the ENS. Adapters recognize events, collect and transform data, andexchange data with the ENS. They also handle exception conditions, and canoften dynamically (or with minor reconfiguration changes) accommodate newrevisions of back-end applications.

A comprehensive adapter suite should include adapters for common technolo-gies (Component Object Model [COM], Enterprise JavaBeans [EJB] and Webservices), industry protocols (electronic data interchange [EDI], SWIFT andRosettaNet) and applications (SAP or PeopleSoft). Adapter development kits(ADKs) are also needed when no prepackaged adapter is available for a partic-ular (often proprietary) application. Adapter suites are available as part of an

integration broker solution (for example, SeeBeyond, Tibco, Vitria and web-Methods) and as unbundled solutions (for example, Actional, iWay, Peregrine,Sybase and Tavis) for use with integration brokers, or "lightweight" integration,often in composite application scenarios in conjunction with applicationservers.

Application Platform SuiteAn application platform suite (APS) is an assembly of essential softwareinfrastructure products sufficient to enable, at run time, the fundamentals ofmodern e-business applications. Gartner Dataquest defines minimal APS infra-structure as consisting of:

An application server

An enterprise portal server

An integration suite

A good APS will include other product categories, such as an integrating devel-opment framework and integrated systems management. In fact, these addedproduct types will probably become the key features to attract future users tothe vendors' APS offerings. Colloquially, an APS is also referred to as an"e-business platform." A user can assemble an APS from different vendors'component parts, but increasingly, leading software vendors offer an all-in-one, "one stop shopping" APS assembled from their own products.

The configuration of an APS reflects the central importance of componentarchitecture, service-oriented architecture, Web services, portal-style user inter-action and application integration to most modern business applications. Users


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facing the job of developing and deploying increasingly complex e-businessapplications look for solutions that offer simpler procurement of tools, more-productive development of software, and more-effective maintenance andmanagement of applications. Vendors have targeted their APS products atmeeting these essential requirements of modern enterprise computing.

Application ServersAn application server is a modern form of platform middleware. It is systemsoftware that resides between the operating system on one side, the externalresources (such as DBMS, communications and Internet services) on the otherside and the users' applications on the third side. The function of the applica-tion server is to act as host (or container) for the user's business logic whilefacilitating access and performance of the business application. The applicationserver must perform despite the variable and competing traffic of clientrequests, hardware and software failures, distributed nature of the larger-scaleapplications and potential heterogeneity of data and processing resourcesrequired to fulfill the business requirements of the applications.

A high-end online transaction processing (OLTP)-style application serverdelivers the business applications with guaranteed levels of performance,availability and integrity. An application server also supports multiple applica-tion design patterns, according to the nature of the business application andthe practices in the particular industry for which the application has beendesigned. It typically supports multiple programming languages and deploy-ment platforms, though most have a particular affinity to one or two of these.Some application servers implement standard application protocols, such asJava 2 Enterprise Edition (J2EE) and others, are entirely proprietary. At present,the proprietary application servers are typically built into packaged applica-tions, such as portals and e-commerce solutions, and are not offered as stand-alone products. These application servers are not estimated in this report. OnlyJ2EE-compliant application servers are estimated.

Business Process ManagementSee the definition under AD Software.

Integration SuitesBy definition, an integration broker provides transformation and intelligentrouting. The broker itself is just one component of a suite of related middlewaretools, which may also support BPM or a message warehouse (for example, amechanism to store and retrieve messages to be retransmitted or analyzedlater). Broker suites must have a repository for metadata descriptions of theinput/output message formats (for example, a message dictionary) and trans-

formation/routing rules. They also include development tools for definingtransformation rules and routing flows, security facilities, and administrationand monitoring facilities to manage broker configuration. Virtually all provideadapter development tools, off-the-shelf adapters for packaged applicationsand their own MOM, in addition to gateways to external platform middlewareand MOM products. An integration broker may run directly on the operatingsystem (OS) or be hosted by platform middleware (for example, a TPM orORB).

Message-Oriented MiddlewareMOM products provide connectionless program-to-program communicationsservices for intra-application and inter-application (for example, integration)

purposes. Interactions may be asynchronous (one-way, store-and-forward) orsynchronous (one way or two-way request/reply exchanges). MOM productscomplement application servers by providing features, such as guaranteed


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once and only once delivery, broad platform support (they run on many oper-ating systems) and property- or subject-based publish-and-subscribe. UnlikeRPCs or basic application servers, MOM products also support one-to-many(1:m), many-to-one (m:1) or many-to-many (m:mn) delivery. All major Javaapplication servers and most integration suites now include a bundled MOMservice, often based on the Java Message Service (JMS) standard. However,stand-alone (unembedded) MOM products are also still sold.

Object-Request BrokersGartner Dataquest considers ORBs to be platform middleware rather thancommunications middleware because of the many environmental and resourcemanagement services that such products provide (especially program activa-tion, which RPCs traditionally did not offer). From 1994 through 1998, ORBvendors as diverse as Iona, Inprise and Microsoft added transaction manage-ment and other features traditionally found in TPMs to their ORBs to enabledemanding, production applications. Most ORB products thereby evolved intoOTMs, just as TPMs added component interfaces and also evolved into OTMsfrom a separate starting point. More recently, the ORB vendors have addedsupport for Web browser clients through various mechanisms. Although theseproducts began as ORBs, there is relatively little structural difference between aWeb-enabled ORB and a Web-enabled application server except that the ORBprogramming application programming interfaces (APIs) may be in terms ofCommon Object Request Broker Architecture (CORBA) or Component ObjectModel Interface Definition Language (COM IDL) rather than JavaBeans,ActiveX Controls or other APIs. However, ORB functionality can be andoften is used as communications middleware. All leading ORB products, aswell as the CORBA specification, during the past 10 years, have delivered fullfunctionality of platform middleware.

Enterprise Portal Server

An enterprise portal server is used by enterprises to build a gateway, providingaccess to and interaction with relevant information, applications and businessprocesses for select targeted audiences, delivered in a highly personalizedmanner. A portal product is a type of platform middleware, but it may also beconsidered a form of integration middleware because it may include gateways,transformation functions and some type of intelligent routing (for example, itcan include some form of basic integration broker).

Transaction Processing MonitorsThe earliest form of platform middleware was the TPMs. Products, such asIBM's CICS and IMS, and Unisys' TIP, have been used on mainframes since thelate 1960s, and Unix TPMs, such as Tuxedo, originated in the 1980s. Over the

years, these products added support for distributed servers, intelligent desktopclients (rather than dumb terminals) and Web browser clients, and are nowadding component-style programs, such as JavaBeans. There is little essentialtechnical difference between most of these TPM products and the newer flavorsof platform middleware, such as Web application servers and ORBs. That is,they can all act as Web application servers.

Other MiddlewareOther categories of middleware, not directly covered in the market research,include:

RPC Communications middleware products, which provide synchro-

nous, request/reply communications via RPCs Data management middleware Products that enable programs to read

from and write to databases or files on other computers


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Open database connectivity (ODBC) drivers and database gateways Products for remote file access and other products oriented toward provid-ing communication of queries and data to and from a DBMS are examples ofdata management middleware.

Web-to-host middleware Products that facilitate the support of HTML orJava-based clients from host-based applications

Componentware Reusable business objects, application templates, modelsand technical components

BI Tools

BI software tools allow the storage, access and analysis of data in a datawarehouse. This includes online analytical processing (OLAP) tools, executiveinformation systems, query-and-reporting tools, multidimensional tools anddecision support systems.

BI PlatformsBI platforms offer complete sets of tools for the creation, deployment, support

and maintenance of BI applications. They combine database access capabilitiesStructured Query Language (SQL), OLAP data manipulation, modeling func-tions (that is, what-if analysis), statistical analysis, and graphical presentationof results (charting) to create data-rich applications, with custom end-userinterfaces, organized around specific business problems, with targeted analy-ses and models.

The BI platform segment is the less-mature segment of the BI tools market, andsells to original equipment manufacturers (OEMs) and independent softwarevendors (ISVs), as well as directly to IS organizations and end users. Many BIplatform vendors also sell applications as the platform's justification.

Enterprise Business Intelligence SuiteEnterprise business intelligence suites (EBISs) are the successors to the basicquery and reporting tools. They are supplanting or extending them, to providesupport for varying levels of users, with a variety of query, reporting and(lightweight) OLAP capabilities, with minimal training. Although OLAP toolusage is spreading, basic query and reporting tools remain the most ubiquitousBI tools, especially in Europe. Because of strong Web affinity associated withEBISs, some vendors have described their EBISs as BI or Web portals. Theseportal offerings typically provide a subset of EBIS's functionality via a Webbrowser. However, the vendors have been steadily increasing this functionalityto be closer to that provided by full-client desktop tools.

Collaboration Software and Knowledge Management ToolsCollaboration software and knowledge management tools are products for themanagement of documents and document production processes in a collabora-tive environment. These systems include basic document library functionalitywith version control and check-in/check-out abilities. It also includes contentmanagement systems intended purely to support Web content created forpublication.

E-Mail and CalendaringE-mail and calendaring software includes workgroups to global enterpriseplatforms, offering e-mail and potentially additional services, such as calendar-

ing, collaborative service applications or Web-based unified messaging. Theseproducts may also include integrated directory capability.


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Real-Time CollaborationReal-time collaboration tools support interaction between participants in real-time, in a meeting or presentation format. They include application sharing andshared whiteboard software.

Team SupportTeam support tools primarily provide for document-based collaboration,targeted at teams with self-administration. They need not include e-mailcapability, which may be already in place. They may include some real-timecollaboration capabilities.


Data Mining ToolsData mining tools are used to replace or enhance human intelligence byscanning through massive storehouses of data to discover meaningful newcorrelations, patterns and trends by using pattern recognition technologies and

statistics.

Data Quality ToolsData quality tools are used to improve the understanding, accuracy, andintegrity of data by identifying and correcting inconsistent or poor data inoperational systems and the data warehouse architecture.

Extraction, Transformation and Loading ToolsExtraction, transformation and loading (ETL) tools are used to extract datafrom multiple data sources (typically operational applications). Using businessrules, that data is integrated and transformed, then loaded to a target datawarehouse or data mart (or occasionally to other application databases). MostETL tools can access a range of data source and target types (data formats),which includes a library of built-in transformation functions, that are sup-ported by a metadata repository and provide some degree of support for theoperational aspects of data movement (that is, scheduling, job control and errorhandling).

Database Management Systems

A DBMS is a product used for the storage and organization of data that typi-cally has defined formats and structures. DBMSs are categorized by their basicstructures and, to some extent, by their usage or deployment. For reportingpurposes, a product must be assigned to a single category, which may include

the following: pre-relational DBMS, RDBMS, embedded DBMS, desktop DBMSand object-oriented DBMS (OODBMS).(The pre-relational and relational seg-ments are subsegmented to identify the products most commonly used in theembedded market and those typically considered as desktop products.)

Pre-relational DBMSDBMS architectures were defined before relational theory became widely used.The pre-relational DBMS generally is based on a hierarchical structure or anavigational (also known as network) structure. The pre-relational DBMS gen-erally runs on a mainframe system or on an operating environment providedby a single computer systems' vendor. Pre-relational DBMSs are typicallyhighly optimized for large data volumes and high transaction-processing

performance.


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Relational DBMSThe RDBMS architecture is based on a formal method of constructing a data-base in rows and columns using rules that have formal mathematical proofs.RDBMSs originated in the work of E.F. Codd. In an RDBMS relationshipsbetween files are created by comparing data, such as account numbers andnames. In addition, a RDBMS has the flexibility to take any two or more files

and generate a new file from the records that meet the matching criteria.

Embedded DBMSEmbedded DBMS products are defined as products used as part of the deploy-ment of applications that can range from a stand-alone desktop in a small LANto a large mainframe class system. An embedded DBMS product typically doesnot come with a complete set of development tools, but rather requires thatdevelopment be accomplished with separately acquired tools. This kind ofDBMS may be bundled with an AD tool to provide a complete developmentenvironment. The DBMS should be capable of being installed invisibly whenthe application is installed. Products targeting the evolving mobile computingmarket will be included in this subsegment.

Mobile Embedded DBMSMobile embedded DBMS products are embedded DBMSs targeting the evolv-ing mobile computing environment. The mobile embedded DBMS productmay be bundled with sets of AD tools to provide a complete developmentenvironment, or the development tools may be acquired separately. The DBMSshould be capable of being installed invisibly when the application is installed.

Desktop DBMS ProductsDesktop DBMS products contain not only the database engine but also thetools, such as a forms generator and report writer, that are used to create a

complete application environment. Desktop DBMS products are typically usedon single-user systems running the DOS, Windows or Macintosh operatingsystems.

Object-Oriented DBMSOODBMSs are DBMSs that allow the data to be defined and manipulated asobjects via methods that hide the base data. The first wave of OODBMSs hasadded relational interfaces to an object-oriented foundation.

Embedded Software Tools

This software is researched in Gartner Dataquest's Design and EngineeringWorldwide cluster. See the"2003 Technical Applications Software Guide,"SEMC-WW-GU-0010.

Network and Systems Management Software

NSM is intended to represent all of the tools needed to manage the provision-ing, capacity, performance and availability of the computing, networking andapplication environment. Gartner Dataquest divides the NSM market into ninemajor segments. (Not all these segments may be estimated or forecast everyyear.)

DBMS ManagementIncluded here are tools for monitoring and diagnosing problems with data-bases, for analyzing and improving the performance of databases, and forroutine administration of databases, including configuration changes. Exam-ples include DBMS monitors, SQL turners, space tuners, reorganization tools,


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utilities, loaders and unloaders, and many others, as well as suites that mayinclude several of the above.

Application ManagementIncluded here are tools for monitoring and diagnosing problems withpackaged (and custom Web) applications, for analyzing and improving the

performance of applications, and for routine administration of applications,including some configuration changes. Examples include tools for managingmessage queuing (MQ) Series, e-mail servers, Web servers, J2EE and.NETapplication servers, ERP applications, CRM applications, e-commerce applica-tions and others. Packages most often targeted by vendors include SAP R/3,Domino, Exchange, Siebel, BEA Web logic, and IBM WebSphere. Some vendorsoffer suites that manage the infrastructure behind the application as well as theapplication itself thus, they may include management of DBMSs, systemsand network links as all-inclusive features.

Availability and Performance, Other NSMThese are software products, including enterprisewide event consoles, that are

used to monitor and manage the performance and availability of systems, net-works (and increasingly storage) mainly beneath the DBMS and applicationlayers. (Management of databases, applications and networks is covered inseparate categories with those names.) In cooperation with separate securityproducts, event management/fault management products can recognize andtrigger a response to breaches in security via separate security products. Eventmanagement tools also collect statistics about events and usage, and may per-form historical trend analysis. System administrators can view this analyzeddata in near real time and use the data to respond to conditions displayed andto guide their reassigning of resources using separate configuration manage-ment tools. Event management (fault management) tools are used to collect,report and diagnose problems (faults) identified in the environment. Root-

cause analysis tools for networked systems are in this segment. This segmentalso includes IT operations and administration "policy" software, which createsand manage lists of users (in cooperation with security and human resourcesmanagement system [HRMS] products) and lists of the environment's ele-ments, determines appropriate access policies to those elements on a per useror "role" basis, and audits adherence to those policies. Tools for internal charge-back and capacity planning, as well as tools that design an internetwork, are inthis segment. Performance monitoring and analysis products are included here.This year, the service management category was merged with availability andperformance because performance products and service management productswere becoming indistinguishable. Performance (and service management)products provide a service-level view and analysis of end-to-end performance(and often of availability as well). These products are evolving toward a

business activity view of the IT and Web infrastructure (business activity moni-toring [BAM]). This logical, higher-level management layer will focus on thequality-of-service and service-guarantee issues linked with underlying moregranular network, system, Web and application management. Performance(service) software is sometimes used in-house or is outsourced from a third-party provider, such as a telecommunications carrier or Web hoster. Perfor-mance tools focus on comparing the expected quality of resource availabilityfor a resource or "service" with actual results. The tools use historical data andinclude features such as baselining, trend analysis, historical usage analysis,service-level reporting and, in some cases, interfaces to chargeback and billingsystems. Included here are service-level agreement tools and customerresponse time measurement tools.


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Network ManagementApplications designed to isolate and resolve faults on the network, measureand optimize performance, manage the network topology, track resource useover time, initially provision and reconfigure elements, and account fornetwork elements. Suites that include fault monitoring and diagnosis, provi-sioning/configuration, accounting, performance management, and TCP/IP

application management but only for networks are also included here.This network management segment is intended for products that are mainly orentirely network-oriented and used primarily by enterprises.

Configuration ManagementConfiguration management (CM) software includes stand-alone products aswell as suites of products that can initially provision/configure desktops, serv-ers or mobile devices, and then manage the change of configuration settings,software and increasingly the files and data on those elements on an ongoingbasis. Included in this category are stand-alone products for software distribu-tion, remote control, software packaging, personality migration, softwareusage metering, and mobile device management. Also included here are prod-

uct suites that lead with provisioning and CM but may include features such asasset discovery, automated backup, bare metal boot, self-healing functionality,change management, data synchronization or even help desk features. Whenthose features asset discovery, automated backup, bare metal boot, self-healing functionality, change management, data synchronization and helpdesk are sold as stand-alone products, that revenue is in other categories, notCM. This category replaces the desktop management (DTM) category. CM isfor production systems only and is distinct from software configurationmanagement (SWCM). SWCM manages the change and configuration of devel-opment systems and is used primarily by the programming staff rather thanthe systems administration staff. Some SWCM and CM vendors are partneringto provide a linkage between systems. Also, the CM category does not include

vendors that position their products primarily as electronic software distribu-tion (ESD) or as content distribution (CD). However, some vendors arepartnering across category lines, pointing to a potential market convergence inthe future.

IT Service DeskIT service desk (ITSD) products can range from simple c

software_market january 2004

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