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Software Market Research Methodology and Definitions, 2003-2004 Gartner Dataquest Guide Publication Date: 16 January 2004

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Software Market ResearchMethodology and Definitions,2003-2004

Gartner Dataquest Guide

Publication Date: 16 January 2004

©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

Authors Colleen GrahamNicole LatimerFabrizio BiscottiJoanne CorreiaChad EschingerChris 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 formwithout prior written permission is forbidden. The information contained herein has been obtained from sources believed tobe reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shallhave no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. Thereader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressedherein are subject to change without notice. 119016

©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 ................................................................................................................................................ 15Requirements 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 .......................................................................... 17Other AD Software................................................................................................................................. 17

Application Integration and Middleware............................................................................................... 17Adapter Suite .......................................................................................................................................... 18Application Platform Suite ................................................................................................................... 18Application Servers................................................................................................................................ 19Business Process Management............................................................................................................. 19Integration Suites ................................................................................................................................... 19Message-Oriented Middleware............................................................................................................ 19Object-Request Brokers ......................................................................................................................... 20Enterprise Portal Server ........................................................................................................................ 20Transaction Processing Monitors ......................................................................................................... 20Other Middleware.................................................................................................................................. 20

BI Tools ......................................................................................................................................................... 21BI 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.................................................................................................................................. 22Extraction, Transformation and Loading Tools ................................................................................. 22

Database Management Systems ............................................................................................................... 22Pre-relational DBMS .............................................................................................................................. 22

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Table of Contents (Continued)Page

Relational DBMS.................................................................................................................................... 23Embedded DBMS .................................................................................................................................. 23Mobile Embedded DBMS..................................................................................................................... 23Desktop 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 ................................................................................................................................ 26Job 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................................................................................................................................. 295. Enterprise Application Software Definitions ............................................................................................. 31

Customer Relationship Management ..................................................................................................... 31Sales ......................................................................................................................................................... 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.................................................................................................................................... 41Business Activity Monitoring................................................................................................................... 41Collaborative Commerce .......................................................................................................................... 41Corporate Performance Management..................................................................................................... 41Contract Management............................................................................................................................... 42

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Table of Contents (Continued)Page

DBA Software Tools ................................................................................................................................... 42ERP II and Enterprise Application Suite................................................................................................. 42Mobile and Wireless Packaged Applications Software......................................................................... 42Mobile and Wireless Infrastructure Software Platforms....................................................................... 42Order Management .................................................................................................................................... 42

Product Life Cycle Management.......................................................................................................... 42Smart Enterprise Suites.............................................................................................................................. 43Supplier Relationship Management ........................................................................................................ 43Web Services Software ............................................................................................................................... 43Other Markets ............................................................................................................................................. 43

ASPs and Application Hosting ............................................................................................................ 43Open Source Software ........................................................................................................................... 43Software Solutions Markets .................................................................................................................. 43New Categories ...................................................................................................................................... 44

7. Operating System Definitions....................................................................................................................... 45Operating Systems...................................................................................................................................... 45

Unix .......................................................................................................................................................... 45Linux ........................................................................................................................................................ 46iSeries (OS/400)...................................................................................................................................... 46zSeries (OS/390) ..................................................................................................................................... 46Windows Desktop.................................................................................................................................. 46Windows Server ..................................................................................................................................... 46Other OS .................................................................................................................................................. 46

8. Platforms .......................................................................................................................................................... 47Java ............................................................................................................................................................... 47.NET.............................................................................................................................................................. 47

9. Worldwide Geographic Regional Definitions............................................................................................. 49Asia/Pacific Region.................................................................................................................................... 49

Countries of Specific Interest................................................................................................................ 49Rest of Asia/Pacific................................................................................................................................ 49

Western Europe Region ............................................................................................................................. 49Countries of Specific Interest................................................................................................................ 49Rest of Western Europe ......................................................................................................................... 49

Central/Eastern Europe Region............................................................................................................... 49Countries of Specific Interest................................................................................................................ 49Rest of Eastern Europe .......................................................................................................................... 49

Japan Region ............................................................................................................................................... 49Countries of Specific Interest................................................................................................................ 49

Latin America Region ................................................................................................................................ 50Countries of Specific Interest................................................................................................................ 50Rest of Latin America ............................................................................................................................ 50

Middle East and Africa Region ................................................................................................................ 50Countries of Specific Interest................................................................................................................ 50Rest of Middle East and Africa ............................................................................................................ 50

North America Region............................................................................................................................... 50Countries of Specific Interest................................................................................................................ 50

10. Research Metrics ............................................................................................................................................. 5111. Exchange Rates................................................................................................................................................ 5312. Vertical Market and Company Size Segments............................................................................................ 5513. Channel Definitions........................................................................................................................................ 59Appendix A — Glossary of Terms ...................................................................................................................... 61

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List of FiguresFigure Page

1-1 Software Segmentation Structure.......................................................................................................... 21-2 Infrastructure Software Segmentation Structure ................................................................................ 31-3 Applications Software Segmentation Structure .................................................................................. 4

List of TablesTable Page

2-1 License Type Matrix .............................................................................................................................. 102-2 Software Revenue Components Broken Down by Software Business Model.............................. 11

11-1 Prevailing Annual Exchange Rates, 2000-2002.................................................................................. 5312-1 Vertical Market Segmentation.............................................................................................................. 5512-2 Company Size Segments ...................................................................................................................... 57A-1 Report Glossary ..................................................................................................................................... 61

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

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

Market Share MethodologyGartner 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 categorieswithin 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)

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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

Market Share and Forecast: Overview and Methodology 3

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

Figure 1-2Infrastructure Software Segmentation Structure

Source: Gartner Dataquest (December 2003)

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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 ManagementSoftware

Email & Calenaring

Real Time Collaboration

Team Support

Collaboration Software and KnowledgeManagement Tools

Data Mining Tools

Data Quality Tools

ETL Tools

Data Warehouse 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

4 Software Market Research Methodology and Definitions, 2003-2004

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

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 otherresearch organizations.

Research ProcessAt 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 mostcritical 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

Source: Gartner Dataquest (December 2003)

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 Portfolio Management

Market Share and Forecast: Overview and Methodology 5

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

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 measuresprovide 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 MethodologyIn 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 inGartner'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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©2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 16 January 2004

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.

©2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 7

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 arefollowing 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 RevenueGartner 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 newlicense 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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©2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 16 January 2004

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

Abstract Components vs. Real World ComplexityIf 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.

Software Revenue Components and Licensing Models 9

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

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 LicensesGartner 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 GartnerDataquest, 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

10 Software Market Research Methodology and Definitions, 2003-2004

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

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 reportingpractices 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 No

Subscription License Term Yes

Appliance License Forever Varies

Source: Gartner Dataquest (December 2003)

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Table 2-2Software Revenue Components Broken Down by Software Business Model (Percent)

GartnerDataquestConcept

PerpetualLicense Term License

Software with anAppliance/Board

SubscriptionLicense Without

Hosting

SubscriptionLicense With

Hosting

New License 100 100 30 70 65Update License 0 0 0 20 20Technical Support 0 0 0 10 10Hosting 0 0 0 0 5Hardware 0 0 70 0 0Total 100 100 100 100 100

Notes: Term license is applied when the vendor does not include updates in the license.Gartner Dataquest does not include "hosters" that are merely reselling a third-party vendor's software intellectual property. Such a hoster is adistributor, not a software vendor earning license revenue from its own software intellectual property.Source: Gartner Dataquest (December 2003)

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Chapter 3Software Segmentation

Product Market DefinitionsThe software market segments covered contain a wide variety of products andtechnologies. 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 ViewsIn 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 BWsolution, 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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Looking only at stand-alone products would end up showing the trends of onlyone side of the software market, completely missing the relevance of vendorsthat are exploring this strategy of embedding functionality to make their coreproducts more attractive and competitive. These software vendors are begin-ning to capture increased numbers of customers that are choosing to use thisembedded functionality rather than purchasing a stand-alone product from atraditional vendor. As a result, Gartner Dataquest has developed a methodol-ogy to allow us to view the market from a stand-alone perspective to identifytrends occurring among traditional vendors, as well as from a compositeperspective, which incorporates the activities of non-traditional vendorsthat are impacting the software market by embedding software functionalitytargeted at one market into software products sold into another segment.

Stand-Alone and Composite ViewsGartner Dataquest looks at certain software markets affected by this new trendfrom two perspectives: stand-alone and composite. We refer to these perspec-tives as "views" and not as markets since they are simply different ways oflooking at the same market.

■ Stand-alone products are those that are sold on their own as distinctivesolutions. Looking at the market from a stand-alone perspective means con-sidering only those products that are sold into a specific software market andnot including any revenue from products from other segments that mayinclude similar embedded functionality.

■ When Gartner Dataquest creates composite views of various markets, weestimate revenue that can be attributed to functionality embedded in prod-ucts not being marketed and sold primarily for their capabilities in thatmarket. To this estimate, we add the amount of licenses generated byproducts sold as stand-alone; hence the term "composite." The view can besummarized with the equation:

❑ Stand-alone + embedded component = composite view

In terms of forecasts, Gartner Dataquest looks at the outlook of the stand-aloneand composite views. Of the two, the composite view is projected to grow morerapidly because, as vendors and technologies consolidate, and as functionalityis embedded in other software, more enterprises will find this embeddedfunctionality to be adequate in meeting their needs, and thus will not need topurchase a stand-alone product.

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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 ofAugust 2003.

AD SoftwareThe 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, providestraceability 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 supportingorganization 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 companionof 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 anabstracted level of language.

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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 disciplinesto 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 MiddlewareAIM 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 anintegration 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 ServerAn 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 theyears, 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 readfrom 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 ToolsBI 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, supportand 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 Warehouse Tools

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 andstatistics.

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 SystemsA 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 includethe 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-processingperformance.

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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 filesand 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 acomplete 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 ToolsThis 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 SoftwareNSM 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 theperformance 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 areused 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 abusiness 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/IPapplication 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 includevendors 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 call tracking/troubleticketing products to sophisticated solutions for the complete business manage-ment of an IT department's or an outsourcer's people, processes and tangibleassets. Most products take advantage of automated escalation policies, andregularly integrate with NSM systems for links to inventory repositories, con-figuration information and remote control. The most-sophisticated productsalso may link to dominant brands of corporate portals, workflow engines, pro-curement modules and HR systems, or include these as proprietary features.Only products that are positioned as ITSDs are included in the ITSD category.For example, portals that include self-service desks are considered portalsproducts, which are tracked in AIM. Products positioned as workflow plat-forms are also tracked in AIM as integration brokers.

Some service desk/call center vendors have technology that is marketed to theinternal IT department and to the external customer support department. Thefraction of vendor revenue from customer support software is tracked inGartner Dataquest's application software Cluster as CRM software. Basic func-tions of an ITSD include call management, problem notification and resolutiontracking. Virtually all products support add-on knowledge modules as part ofend-user and systems administrator problem resolution activity. Self-helpinvolving a knowledge search is included here when it pertains to IT. (Stand-alone automated restore, also called self-healing — where the end user or helpdesk personnel are not involved — is part of the CM category.)

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ITSD tools are often routinely used to orchestrate personnel to manually exe-cute IT change projects, such as card swaps, hard drive swaps and others.However, change management also means automated or scriptable configura-tion change management, which is part of the CM category. Project manage-ment software is also often used for coordinating people-intensive changeprojects. It is a subcategory of AD tools and is not covered in NSM. Changemanagement is also practiced by programming teams during the developmentprocess using software configuration management tools. Thus, change man-agement is an activity that may be addressed by ITSD, CM, SWCM or projectmanagement software, as well as other tools. Stand-alone change and configu-ration management products that were in consolidated service desk (CSD) arenow in the CM category.

Asset ManagementThis category includes products that provide one or all of the following: assetdiscovery, asset management, an asset database/repository, asset portfoliomanagement, tracking of purchases, leases, contracts and disposal pertainingto IT assets including hardware and software. Links to general ledger account-ing systems modules, such as the capital asset ledger, are common. Integrationwith capacity products, user administration products and order entry ande-procurement is desirable. When paired with an ITSD, asset management canbecome part of a complete solution for the business management of an ITdepartment or IT outsourcer.

Job SchedulingJob scheduling tools supervise a logical process (several jobs or programs) asthey execute in a mainframe or distributed environment, providing schedulingand dependency management of the process as it runs, mainly in sequence,across disparate systems, geographies and applications. The tools in this cate-gory are used for "batch integration" of heterogeneous applications and datastores. (Workload management products — used to divide and distribute theworkload of a single job, in parallel, over multiple systems or processing unitsso it can complete faster — have been moved from NSM to the OS category.)

Output ManagementOutput management products include those that support document, reportand file output to printers, faxes and other viewing media, such as the Web.Typical products can translate between different output formats, includingpopular billing formats. Many have repositories to store output files for Webviewing or other on-demand delivery. Some also deposit and retrieve outputfrom long-term archives. Print management is a subset of output managementthat focuses only on print management.

Security SoftwareSecurity software is the sum of all the segments below and represents all soft-ware needed to control and monitor access to internal and external resources.

This includes products for security management, such as access control andadministration, as well as operational security products, such as antivirus,encryption and intrusion detection products.

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AntivirusAntivirus software products scan, detect and correct viruses and maliciousmobile code at the desktop, at the server level and, increasingly, when embed-ded in other devices in the network. There are two key categories: server-basedantivirus software and desktop-based antivirus software.

■ Consumer antivirus — Desktop and subscription antivirus sold to SOHOand consumers

■ Enterprise antivirus — Desktop, server, gateway and subscription antivirussold to small-tomidsize businesses (SMBs) and enterprises

Content FilteringThese include acceptable use control products, such as uniform resource loca-tor (URL) blocking products and e-mail filtering and spam blocking products.

■ Web-acceptable use

■ E-mail outbound control

■ Anti-spam

Network SecurityFirewalls are software that receives http and other network and port connec-tion requests and verifies basic privileges before permitting the connection.Two types include perimeter firewall software and PC-based (personal) fire-wall software.

Application-aware firewalls are software that can examine the payload of pack-ets and detect malicious code and messages at the application layer.

Virtual private network (VPN) is software that creates a secure virtual privatenetwork tunnel, or session, over the public Internet infrastructure. It is used bytelecommuters and branch offices. Secure Sockets Layer VPN is a new emerg-ing "thin" approach to VPN included here.

■ Multifunction security software (suite)

■ Firewall/VPN

■ Firewall/VPN/antivirus/intrusion detection system (IDS)/content filtering

Intrusion DetectionIDS products monitor network traffic through observation of actions, securitylogs or audit data to detect, identify and isolate attempts to make inappropriateor unauthorized access to system resources. This includes two categories: host-based IDS software and network-based IDS software (that is, it runs on a deviceto be connected to the network).

■ Network IDS

■ Host IDS

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EncryptionEncryption software products provide a mechanism to systematically encodeand decode data so that an unauthorized party cannot decipher it, and includese-mail encryption applications, mobile encryption and developer encryptionsoftware kits.

■ Mobile encryption

■ Other encryption

■ Public key insfrastructure (PKI) encryption and protocol toolkits

Security Event and Performance ManagementThis is software that provides a single console or integration point for collectingand displaying event alarms as well as challenge/threat history trends fromheterogeneous security devices, such as antivirus devices, IDS devices, VPNdevices and other devices subject to threats, as well as from server and clientPC logs.

Security Administration Software■ Vulnerability assessment and configuration management — This is software

that takes an inventory of security devices, network devices and hosts,including host ports, and compares found configurations of hardware andsoftware elements against best practices, recommending changes in the con-figurations and sometimes automating deployment of changes. It includespatch management.

❑ Host vulnerability assessment and inventory scanning

❑ Security configuration management — In addition to simple inventoryscanning, this generally includes a repository of configuration parametersand version control, distribution of parameters and security patch updatesand reports. It may also feature security device patch management. CMhas a higher level of automation features and scheduling features notfound in vulnerability assessment and scanning tools. It often providesroll-back capability.

■ Identity and Access Management — Identity and access management soft-ware products are used to create and manage user identities, provideauthentication and to permit users access to system resources based on pre-defined criteria. This segment includes Web-based management products,PKI, and single sign-on (SSO) and other secure provisioning products andauthentication software.

■ Directories and metadirectories are not included in this study, but are oftenassociated with this category.

❑ Identity management, user provisioning, password management andother user administration tools

❑ Authentication (software and imputed software value of certain hardwareproducts that are mainly for authentication; includes SSO products)

❑ Authorization and access (includes enterprise asset management [EAM])

❑ PKI suites (omits certain encryption toolkits which are tracked asencryption)

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■ Other security administration software — This segment contains the rest ofadministration and business-oriented security software. The category alsoincludes miscellaneous security software for forensics, case management,spyware removal, policy authoring, risk assessment tools, business continu-ity planning tools and others.

❑ Risk analysis tools

❑ Business continuity planning and critical infrastructure protection plan-ning tools

❑ Regulatory compliance tools

❑ Others

Storage ManagementThis software is researched in Gartner Dataquest's Storage Worldwidecluster. Please see the "2002 Storage Management Software Market Share,"HWST-WW-MS-0137, for full descriptions. Sub-segments include storage infra-structure products, data management products and enterprise storage resourcemanagement.

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Chapter 5Enterprise Application Software Definitions

The focus for application software is to increase the performance of business orpersonal resources. It enables users to leverage the power of computers towardachievement of their business, professional or personal objectives or goals.These definitions are how Gartner Dataquest views the market as of August2003.

Customer Relationship ManagementGartner Dataquest believes that CRM technologies should enable greater cus-tomer insight, increased customer access, more effective customer interactionsand integration throughout all customer channels and back-office enterprisefunctions. CRM is a business strategy whose outcome optimizes profitability,revenue and customer satisfaction by organizing around customer segments,fostering customer-satisfying behaviors and implementing customer-centricprocesses. Most enterprises have a CRM strategy, and the majority use someform of CRM software to achieve this strategy. The CRM software sector, partof the enterprise software market, provides functionality to enterprises in threesegments: sales, marketing, and customer service and support. The sub-segments listed below are defined as components or functions within a CRMapplication and are not reflective of a separate market or in its entirety.

Sales■ Direct sales (field sales/inside sales) — Direct sales builds on the attributes

of technology, functionality and value of order management systems (OMSs)and extends the definition to include functionality for sales execution andsales operations. The direct, B2B sales organization is the traditional saleschannel composed of internal sales resources focused on the selling ofproducts or services directly into the client, customer and prospect base asemployees of the provider company. Direct sales resources may be field-based, calling on customers face-to-face at their locations, or inside sales,selling from a desk environment over the phone.

■ Sell-side commerce — E-commerce sell-side — B2B and business-to-consumer (B2C) enterprise software applications offer manufacturers andretailers the ability to sell, service and market their products to customersthrough the Web and channel partners. Sell-side software solutions alsoenable enterprises to automate the Web sales process and customer experi-ence, gain insight into customer behavior and preferences, improve visibilityinto channel activities and performance, and improve customer satisfactionand loyalty.

■ Partner sales — The sales-focused partner relationship management (PRM)applications designed to improve an enterprise's ability to market, sell andservice end customers through channel partners. Includes many of thetraditional elements contained in a direct sales solution (opportunity man-agement), but configured for supporting a partner-driven environment.These applications consolidate data and transactions, set business rules andtrack activity, typically used to manage channels partners, distributors,alliance or strategic partnerships, and often a portal to allow bidirectionalinformation flow and communications between partners.

■ Retail sales — The additional collection of sales applications required for aretail environment. It includes point-of-sales (POS) applications for record-ing sales transaction, usually a cash register and merchandising software.

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■ Other/specialized — This is the disparate selection of specialist vendors andtechnologies associated with sales force automation. It includes aspects suchas proposal generation, content management, sales portals and guided sell-ing. Although the associated applications are included as part of a directsales or partner sales solution, the niche vendors associated with technolo-gies only offer a specific segment.

Marketing■ Customer management — These are applications that allow prospecting and

lead generation, lead management, segmentation, campaign management,multi-channel interaction, event driven management, e-marketing, loyaltymanagement, privacy management and dialogue management.

■ Resource management — These are applications that allow strategic plan-ning and budgeting, program management, creative development anddistribution, content management, media planning and execution, eventscoordination and resource measurement.

■ Data and analytics — This is an application providing data preparation, dataquality management, measurement and reporting, predictive modeling,profitability and optimization.

■ Demand network management (including partner marketing) — These areapplications providing content distribution, trade promotion and partnerlead management. This is a component of PRM.

■ Brand and product management — These are applications that provide fortrade promotion, product development management and market research.

Customer Service and Support■ Contact center customer service software — Applications or functions,

which are designed to allow employees or agents of a company to supportthe clients directly, usually within a call or contact center, typically non-product support focused on service that is business related (such as dissatis-faction, problems with shipment and billing).

■ Contact center technical support software — Applications or functionsdesigned to allow employees or agents of a company to support the clientsdirectly, usually within a call or contact center, typically focused on clients'product usage, implementation and problem resolution.

■ Customer self service and support — A blend of customer-initiated interac-tion technologies that are designed to allow customer to service themselves.It includes electronic records management systems (ERMS), chat and knowl-edge bases.

■ Field service management software — Applications that are designed withina CRM environment that enable agents to diagnose problems categorically,identify resource and dispatch it to client with proper tools or materialsrequired for the specific problem. It includes field service workforce manage-ment and intelligent device management (IDM).

■ Contact center performance management — It includes workforce manage-ment software, e-learning and quality assurance (QA). This is a call andcontact center application enabling the management of communicationqueues, agent schedules, monitoring call flow and traffic. It is designed toautomate the workforce management, and increase efficiencies by reducingwaste and streamlining work paths to the workforce.

■ Partner customer support software — Service-focused PRM applicationsdesigned to improve an enterprise's ability to market, sell and service endcustomers through channel partners. Key components include entitlementmanagement, order management, service-level management and materialreverse logistics.

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■ Contact center infrastructure — Software and hardware designed to run acontact/call center. This includes automatic call distributors (ACDs), inte-grated voice response unit (IVRU), computer telephony integration (CTI),universal communications or universal queue management, integratingmultiple channels for a call/contact center (integrating ACD/IVRU/CTI/chat/ERMS). Please note, this subsegment is not tracked or sized by theGartner Dataquest software team.

Enterprise Resource PlanningERP is application strategy focused on a several distinct enterprise applicationsuite (EAS) markets. In general, ERP involves software packages that automateand support the processes of the administrative, production, inventory andproduct development aspects of an enterprise. ERP is considered the back-office application set and is defined as manufacturing, HRMS and financialmanagement systems (FMS).

ManufacturingIn the pursuit of simplifying and accurately defining and sizing software mar-kets, Gartner Dataquest has consolidated and renamed the sub-categories oflast year's traditional ERP segment. The segment is being renamed manufactur-ing and includes, but is not limited to, stand-alone and application softwaresuites that help automate the manufacturing process. The functionality thatcomprises this segment includes, but is not limited to, manufacturing execu-tion, master production scheduling, material requirements planning (includingregenerative manufacturing resource planning [MRP]), inventory control, billsof material/routing (including engineering change control), capacity require-ments planning (including input/output control, finite scheduling and infinitescheduling), and quality tracking/control. The components, from those enter-prises surveyed, that comprise integrated plant systems (IPS) are also includedwithin the manufacturing segment. Procurement has been removed from thissegment and positioned under supply chain sourcing (SCS), reflecting the tran-sition of functionality within this segment.

Human Capital ManagementHuman capital management (HCM) is a set of practices related to peopleresource management. These practices are focused on the organizational needto provide specific competencies and are implemented in three categories:workforce acquisition, workforce management and workforce optimization.The applications that help to enable HCM include recruitment, benefits,education and training, personnel administration, contingent workforcemanagement, time and attendance, organizational development, performancemanagement, compensation planning and strategy, workforce analytics, andpayroll. Employee relationship management (ERM) systems are also includedin these segments.

■ Recruitment — Applications used for the process of finding and attractingcapable individuals to apply for employment. Functionality includes, but isnot limited to, needs analysis, job description, labor market analysis,contingent staffing, internal staffing, advertising, online recruiting, resumetracking, screening and job matching, background checking, drug screening,and testing and assessment.

■ Benefits — Applications which are used for the distribution of healthcareand retirement plan information, managing eligibility questions regardingcoverage, maintaining retirement earning histories, enrollments, new hireprocessing, retirement or vested rights estimates, and benefits terminationadministration.

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■ Education and training — Applications used in the selection, acquisition,development, delivery and maintenance of resources that enhance employeeknowledge and skills

■ Personnel administration — Applications used for employee relations,employee life cycle, employee communication, on boarding, relocation andexpatriate administration, labor management, and local compliance issues(for example, working time directive)

■ Contingent workforce management — Applications utilized for planningand managing the contingent workforce (temporary and contract staff).These solutions assist in activities associated with contract management, bill-ing, performance tracking, scheduling, skills and competency tracking, andtracking job experience.

■ Time and attendance — Applications used for planning, collecting and ana-lyzing labor

■ Organizational development — Applications used for developing/updatingof competency models, creation/update of job profiles as well as compe-tency assessment, gap analysis, developing/implementing improvementplans, and management of improvement efforts

■ Performance management — Applications used for assessing an enterprise'sperformance, using analytical metrics, strategic planning, and a data ware-house approach to accessing and analyzing information

■ Compensation planning and strategy — Applications used for creating andadministrating job descriptions/updates, salaries and employee surveys, set-ting and maintaining salaries, setting and maintaining short- and long-termincentives, and development and implementation of overall compensationpackages

■ Workforce analytics — Applications used to measure and monitor workforcemetrics, including comparison against external benchmarks. These solutionsfor analyzing workforce metrics (such as turnover and time to hire) requiread hoc analysis and query capabilities with multidimensional capability.

■ Payroll — Applications used to process payroll data, reporting and paymentof payroll taxes, issuing payments (via check or electronic payment) andreports to employees, issuing payments to third parties (for example,employee IRAs) and reporting of data to the end user

Financial Management SystemsFMS is an application software suite focused on the automation and processsupport required by the corporate finance function and related departments ofan enterprise (such as accounting). The financials package stores relevant data,provides the IT foundation for running the organization's finances and pre-pares reports for management and external authorities. FMS consists ofaccounting, budgeting, activity-based management, consolidation and indirectpurchasing/procurement "white collar."

■ Accounting — Applications that enable accounting and control, and can befocused in manufacturing and production environments related to product,labor, parts, time and other inventory, and production expenses

■ Budgeting — Applications used to allocate funds for specific businessactivities

■ Activity-based management/financial analytics — Applications driven bythe general ledger system as costs and associated personnel are reconstitutedor allocated to specific activities. This functionality enables organizations tomanage costs in more detail than general ledger or budget applicationsallow.

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■ Consolidation — Applications that amalgamate an enterprise's general led-ger data from internal divisions. These applications can consolidate data bycountry, geographic region, currencies and internal charge-backs, enablingfurther consolidation into a corporate view.

Computer(ized) Maintenance Management SystemEAM functionality evolved from computer(ized) maintenance managementsystem (CMMS) applications that encompass work and materials managementfor fault repair, regular preventative maintenance and service activities. CMMSis not limited to manufacturing; it is also applicable to utilities, facilities, trans-portation and other activities where equipment subject to wear, failure orrepair is utilized. A CMMS solution usually includes purchasing and procure-ment, inventory management, as well as equipment, component and assettracking. CMMS applications do not have financial (beyond cost recording) orHR management capabilities (beyond basic staffing identifications [IDs]) andare typically purchased to integrate with the applications that support financialand HR more fully. These applications are also typically smaller scale in thatthey are designed to run at and for a single site of operations.

Enterprise Asset ManagementDeveloped from the more basic CMMS functionality, EAM systems have beena key tool in asset care and maintenance, repair and overhaul (MRO) procure-ment. The CMMS functionality is extended by the addition of financial man-agement modules, or more advanced cost recording in ledgers at least, andmore advanced HR management to cater for rostering and skills recording.Technically, the EAM applications are also designed to scale to larger numbersof users and to run on multiple sites from a single central database, therebycatering for enterprise, rather than departmental or site requirements. EAM is apart of a strategy to increase plant capacity, using information technology inlieu of new construction in large, asset-intensive enterprises. It integrates keyplant control systems (PCS) and ERP with maintenance activities and functionsto reduce downtime and minimize maintenance spending. In its most completeform, it equates to an ERP II solution for a non-manufacturing environment,such as a utility, mining operation, defense or transportation operation.

EAM consists of asset management, materials management, HRMS andfinancials.

■ Asset management — Application with functionality that assists in identify-ing assets and activities, and manages requests for service and workschedules. In addition, these applications manage job costing, work orders,asset registration, fixed assets, and predictive and preventive maintenance.

■ Materials management — Application with functionality that assists in plan-ning parts and material requirements for maintenance. This is the true originof maintenance, repair and overhaul (MRO) procurement. The applicationsin this segment have capabilities to integrate with procurement manage-ment, enable automatic assignment of activity-based cost (ABC) classes tostock, multiple alternate parts codes, manufacturers and supplies for a singlestock code, calculate optimal inventory based on forecast usage and priorusage, as well as support cycle counting. Modules in this segment includeparts, inventory, orders management and bill of materials (BOM)-orientedtoward jobs, rather than BOM for manufacturing.

■ HRMS — See HCM definition above.

■ Financials — See FMS definition above.

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Supply Chain ManagementThis is a business strategy to improve shareholder and customer value byoptimizing the flow of products, services and related information from sourceto customer. SCM encompasses the processes of creating and fulfilling themarket's demand for goods and services. It is a set of business processes thatencompasses a trading partner community engaged in a common goal ofsatisfying the end customer. Thus, a supply chain process can stretch from asupplier's supplier to a customer's customer.

At a high level, SCM software is segmented into planning, execution and sourc-ing and procurement components. Planning typically deals with activities suchas developing demand forecasts, establishing relations with suppliers, plan-ning and scheduling manufacturing operations, and developing metrics toensure efficient and cost-effective operations. Execution functions manage theprocesses and activities to ensure completion of the plans, including creatingpurchase orders, taking customer orders, updating inventory, managing move-ment of products in the warehouse, and delivering goods to the customer.Sourcing and procurement functions manage the automation and of corporatesourcing and purchasing.

Supply Chain PlanningA subset of SCM, supply chain planning (SCP) applications are designed toprovide forward-looking options for future time horizons. SCM applicationscoordinate assets to optimize the delivery of goods and services, and informa-tion from supplier to customer, balancing supply and demand. A SCP applica-tion suite sits on top of a transactional system to provide planning, what-ifscenario analysis capabilities and real-time demand commitments. Typicalmodules include network planning, capacity planning, demand planning,manufacturing planning and scheduling, and distribution and deploymentplanning.

Supply Chain ExecutionA subset of SCM, supply chain execution (SCE) is a framework of execution-oriented applications that enable the efficient procurement and supply ofgoods, services and information across enterprise boundaries to meet cus-tomer-specific demand. SCE suites have evolved consolidating supply chainexecution components — such as warehouse management systems (WMSs),transportation management systems (TMSs), order management systems andsupply chain inventory visibility (SCIV) — to provide a single solution tomanage the outbound logistics process.

Warehouse Management SystemsWMS are applications that manage the operation of a warehouse or distribu-tion center. Functionality includes receiving, put-away, inventory manage-ment, cycle counting, task interleaving, wave planning, order allocation, orderpicking, replenishment, packing, shipping, labor management and automatedmaterial-handling equipment interfaces. Using radio frequency (RF) technol-ogy in conjunction with bar codes provides the foundation of WMS, deliveringaccurate information in real time.

Transportation Management SystemsTMS are systems used to manage all freight activities across the enterprise.Functions include planning and procuring freight movements, freight ratingand shipping across all modes, route and carrier selection, management offreight, visibility, and freight payment and audit.

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International Trade Systems/Global TradeManagementThese execution systems are designed to automate the import/export businessprocess. The basic functional components are trade documentation generationand transmission, and regulatory compliance validation.

Sourcing and ProcurementWe have renamed and expanded the coverage of last year's e-commerce buy-side segment to better align the essence of the market's evolution. We havemarried the procurement sub-segments, from ERP, with last year's e-commercebuy-side market to more accurately reflect the shifting conditions within thesemarkets. Sourcing and procurement applications are used to support theautomation and management of corporate sourcing and purchasing (or pro-curement) of direct and indirect goods, suppliers, and content (for example,product catalogs, parts databases and supplier directories).

■ Sourcing software is used to help companies understand and improve theterms and conditions of trade to understand enterprise spending. It aids increating an optimal set of suppliers, establishing the terms of trade to bal-ance cost, quality and risk. Strategic sourcing applications include requestsfor proposal (RFPs)/requests for quotation (RFQs) bid management, andsupplier analysis and optimization. Strategic sourcing applications are alsoevolving into the practice of managing longer-term purchasing activity andsupplier relationships. Sourcing applications will have the capability tointerface with procurement systems — for example, in spot buying/spotsourcing environments

■ Procurement applications automate purchasing for direct and indirect goodsand services. These applications are designed to help companies reduce costsby automating and streamlining the purchasing process, connecting buyersand sellers and controlling corporate spending. Functionality includes, but isnot limited to, purchase order processing, master blanket release, receiptand advance-ship notice, settlements and rebates, invoice payment, catalogs,requisition management, project costing, encumbrance (public sector), andinvoicing. Procurement is tremendously complicated and there continues tobe a lack of specificity in its subcategories. Depending on the categories orgoods and business processes, there are broad sets of activities common toprocurement. Such activities include supplier connectivity, needs specifica-tion (such as those expressed by a production plan, materials forecast, workorder material plan or catalog items in a shopping cart) and invoice andpayment processing. Often procurement relies on sourcing and in some cate-gories (for example, capital goods, spot-buys and certain types of services),diminishing the validity of distinctions between sourcing and procurement.Procurement and sourcing are in many ways co-dependent.

■ Marketplaces (e-marketplace) are Web-enabled trading communities thataggregate buyers and sellers to enable transactions, collaboration and con-tent. Marketplace software can also include strategic sourcing, contract nego-tiation, legacy integration and Web-based order management functionality.Marketplaces offer market intelligence to buyers and sellers. Buyers are in abetter position to understand their buying behaviors and, thus, gain controlover their procurement processes. Suppliers are able to collaborate moreeffectively with other partners in the supply chain to reduce inventory,obtain greater visibility of supply chain constraints and lower processingcosts.

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■ Content management addresses the problem of how to take unstructuredproduct content and create and manage structured data. This segmentincludes solutions in data cleansing, parts databases and supplier directo-ries. It also provides functionality that includes catalog conversion, paramet-ric matching engines, dynamic content aggregation, automated integrationto back-end databases, online content updating and multiple languagetranslation.

Project Portfolio ManagementPPM applications provide a set of integrated functions designed to streamlineoutward functions and inward processes of project-intensive departments,industries and organizations. They address a majority of the nine processesdefined by the Project Management Institute's Project Management Book ofKnowledge (PMBoK): project scope management, time management (includingscheduling), cost management, resource management, quality management,project communications management, project risk management and projectprocurement management. The ninth area provides for integration of theseprocesses. PPM applications optimize project delivery by providing, at a mini-mum, integrated functionality to support project planning, tracking, resourceassignment and portfolio reporting. Features often address the followingfunctional areas:

■ Scope management — Preliminary scope planning, including project defini-tions, timelines, size and deliverables

■ Time management — Manages deliverable activity timelines, schedules anddeadlines for projects, tasks, assignments, scope and goals

■ Resource management — Allocates resources using a repository of resourceprofiles (of skills and other attributes), identifies skill shortages and includesresource loading and leveling capability (direct or via third-party toolintegration)

■ Cost management — Estimates and tracks resource and material costs andobtains approval for actual project expenses associated with billing, charge-backs, travel, project materials, or purchase of necessary equipment

■ Procurement management — Supports procuring of external resources andproject related goods

■ Communication management — Data distribution (discussions, e-mail andchat) and project intelligence gathering so participants can collaborate, main-tain, manage, and share current or previous project knowledge

■ Risk management — Tracks individual projects' problems, issues and sched-ule risks, and provides a macro view of multiple projects' risks to weigh withcost and value in portfolio analysis

■ Quality management — Uses corporate or industry standards (for example,project models, templates, project knowledge, workflows and process met-rics) to ensure quality, consistency and efficiency of executed projects andtheir deliverables

■ Integration management — Gathers project data from above segments tostore, report and forecast project progress, manage pipelines and conductportfolio analysis

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Design and EngineeringThis software is researched in Gartner Dataquest's Design and EngineeringWorldwide Cluster. See the Gartner Dataquest Guide "2003 Technical Applica-tions Software Guide," SEMC-WW-GU-0010. Its sub-sectors include:

■ Architectural, engineering and construction (AEC)

■ Electronic design automation (EDA)

■ Embedded software tools

■ Mechanical computer-aided design/manufacturing/engineering (computer-aided design [CAD]/computer-aided manufacturing [CAM]/computer-aided engineering [CAE])

■ Product data management (PDM)

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©2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 41

Chapter 6Emerging and Merging Markets

The previous two chapters defined baseline mutually exclusive product mar-kets, that together provide insight into how the money flows through thesoftware industry. However, many of the most interesting and challengingopportunities for vendors have other dimensions. Some are a composite mix ofbaseline sectors, others are virtual concepts or new technology standards, notreal markets. Still others take less conventional forms, such as the applicationservice provider (ASP) and business service provider (BSP) markets. All ofthem overlap in some way with other markets defined in this or other segmen-tation documents.

Composite MarketsA composite market is one not necessarily tracked and measured on an ongo-ing basis, but that offers an alternative view or cut of our baseline market data(identified in Chapter 4 and Chapter 5). A composite market definition can beuseful for tracking a temporary phenomenon. Occasionally, a composite mar-ket definition foretells the emergence of a long-lasting baseline GartnerDataquest market definition at a later date.

New composite markets are always emerging. Rather than continually reorga-nize the component segmentation, we will address new markets as exceptionalor fringe until they are clearly an established and well-defined market segmentin their own right.

Business Activity MonitoringBAM is neither a market nor a product. It is a concept, such as quality orknowledge management, and it is not new. BAM solutions focus on cross-business processes rather than divisional-, departmental- or technology-specific processes. The scope of integration in BAM solutions expands farbeyond the four walls of a plant or a division, and real time is not necessarilynanoseconds but rather is determined by the requirements of the businessprocess. It brings the near real-time world of the BI operational data storetogether with NSM monitoring and BPM through integration brokers andshared messaging.

Collaborative CommerceCollaborative commerce (c-commerce) involves the collaborative, electronicallyenabled business interactions among an enterprise's internal personnel, busi-ness partners and customers throughout a trading community. The tradingcommunity can be an industry, industry segment, supply chain or supply chainsegment. For some enterprises, c-commerce is already a fact of business life, buthow can they measure it? It is not yet quantifiable with any consistency. It isnot a class of software and it is difficult even to define.

Corporate Performance ManagementCorporate performance management (CPM) is an umbrella term that describesthe methodologies, metrics, processes and systems used to monitor and man-age the business performance of an enterprise. Applications that enable CPMtranslate strategically focused information to operational plans and send aggre-gated results. These applications are also integrated into many elements of theplanning and control cycle, or address BAM or customer relationship optimiza-tion (CRO) needs. CPM applications enable sharing of information across andeven beyond the borders of the enterprise, to all employees, business partnersshareholders and most importantly, customers.

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Contract ManagementContract management is the identification and efficient management of all con-tracts with suppliers. Applications that manage companies' contracts weavethemselves through sourcing and procurement applications. Although contractmanagement is an integral part of sourcing (creation) and procurement(enforcement), we have separated it out as a segment but acknowledge theinterdependencies. Contract management aides sourcing and procurementthrough negotiation, generation and non-repudiation, abstraction, versioningand archiving, compliance management and exception alert generation, anddispute resolution.

DBA Software ToolsDatabase administration (DBA) tools encompass software products includingsystems management extensions for monitoring the health of databases, DBAtools for SQL tuning, space optimization, schema change management, back upand recovery products for files as well as database-aware recovery products,data warehouse administration tools, and certain database development toolsoften used by database administrators. This market could also be called theDBMS aftermarket.

ERP II and Enterprise Application SuiteThe emerging next generation of ERP strategy is called ERP II by GartnerDataquest. ERP II is an application and deployment strategy that expandsout from ERP functions to achieve integration of an enterprise's key domain-specific, internal and external collaborative, operational and financialprocesses.

Mobile and Wireless Packaged Applications SoftwareThe terms mobile application and wireless application are bandied about in thetrade press, often used interchangeably, and can refer to simple stand-alonesoftware or to internetworked processes of great complexity. Mobile and wire-less applications can mean anything from a menuing system on a smartphone,a calendar or a tic-tac-toe game on a PDA to Internet/corporate e-mail connec-tivity up to a sales force automation order-entry system that updates back-enddatabases over a wireless link.

Mobile and Wireless Infrastructure Software PlatformsHere are development tools and deployment servers for creating brand newcustomer mobile applications or for "mobilizing" established conventionalenterprise applications, e-mail and enterprise data stores.

Order ManagementOrder management is a business process and not a specific market. Much of thefunctionality attributed to order management is embedded within and touchescomponents within the CRM, ERP and SCM markets as it guides products andservices through order entry, processing and tracking.

Product Life Cycle ManagementAt its highest definitional level, product life cycle management (PLM) is a pro-cess for guiding products from idea through retirement to deliver the mostbusiness value to an enterprise and its trading partners. PLM employs productinformation and business analysis to support product portfolio strategy,product life cycle planning, management of activities, and execution of thoseactivities through each phase in a product's life. The applications that support

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the business activities enabled through PLM includes product ideation, design,engineering, manufacturing process management, product data management,and product portfolio management.

Smart Enterprise SuitesSmart enterprise suites include a significant combination of technologies, suchas content management, team support, a portal framework and informationretrieval. They may also include expertise location and management, commu-nity technology, process management, and multichannel access.

Supplier Relationship ManagementThere has been much ado for nearly two years about the user benefits of sup-plier relationship management (SRM). With much fanfare and accolades fromthe software industry, there is a still confusion and varying opinion on whatexactly SRM is and what it should encompass. So, is there an SRM softwaremarket? No, not yet. There are a plethora of software applications that supportSRM initiatives but, to date, no true SRM applications.

SRM is a logical extension of SCM. SRM is the latest of a series of innovationswithin SCM and represents an incremental development. As such, SRM is asubset of SCM. SRM represents an evolutionary extension of SCM, driven bythe need for enterprises to create a more comprehensive life cycle view of sup-pliers' operational contribution to the top and bottom lines. Consequently, SRMis an extension of, and builds on, SCM technologies and practices.

Web Services SoftwareDeploying Web services-enabled software will be an evolutionary process, nota revolutionary one. While the majority of software vendors have committed tosupporting Web services software standards within their established productlines, it will take more than four years to evolve these immature standards,build up skills, and plan, build and test for new versions of software thatgradually incorporate these standards. Web services standards will bedeployed through multiple markets, such as integration suites, AD tools andsome enterprise application segments.

Other Markets

ASPs and Application HostingThis is a service addressing the life cycle needs of the application from theinitial IT infrastructure development to maintenance of a complete set of ITbusiness applications. The provider offers software maintenance, conversion,enhancement and support in a hosted environment. This is considered an indi-rect channel for software delivery. This sector is also researched within GartnerDataquest's IT services practices.

Open Source SoftwareOur focus is to measure the direct value of software markets. However, freesoftware can and does have a significant influence on the dynamics of demandand supply, and it influences our research agendas.

Software Solutions MarketsSoftware products are often bought and sold as part of a larger packagecontaining some mix of hardware, software, services, expertise, informationcontent and financing service. To implement, operate and use the solutionsrequires investment in internal resources. The methodology behind our market

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data analysis allows us to unbundle these elements so that we are counting orcomparing similar things. Most of our solutions market research is clusteredinto analyst teams for global industry vertical market analysis and enterprisesolutions.

New CategoriesNew markets are always emerging, which are either the result of the bundlingof several component markets or the arrival of a new layer of tools on top ofestablished technology.

Rather than continually reorganize the component segmentation, we willaddress new markets as exceptional or fringe until they are clearly an estab-lished and well-defined market segment in their own right.

©2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 45

Chapter 7Operating System Definitions

Gartner Dataquest defines an operating system platform as the softwaredeployment environment required for higher layer software to run. That is,business applications code and infrastructure applications code leverage theunderlying OS platform (and hardware platform) to function. Software ven-dors normally target the OS environments with the largest installed base,highest growth or highest margin, as the environments their product will"support." (Though in actuality, it is the OS that supports the product.) OSplatforms are tracked to allow analysis of the changing popularity of differentplatforms with software vendors. What is measured is the ISV revenue attribut-able to particular deployment OS environments. (Not all software applicationor software infrastructure segments have OS platform revenue breakouts esti-mated or forecast.)

Gartner Dataquest tracks software as it breaks out across the following OSs:

■ Unix

■ Linux

■ iSeries OS/400

■ zSeries OS/390

■ Windows desktop

■ Windows server

■ Other operating systems

With the recent emergence of application servers, J2EE and .NET have almostbecome operating environments or deployment environments themselves.(Actually, .NET has already captured as the NT/Windows 2000 OSs; .NET ispart and parcel of these products. These are almost synonyms.). At this time,however, J2EE products are classified by Gartner Dataquest as infrastructureapplications, which themselves run on particular underlying OS deploymentenvironments, such as Solaris, AIX, HP-UX, Linux and others.

Client OSs run on stand-alone devices, such as desktops, laptops, PDAs andcell phones, and are designed to be used by an single individual at a time.Server OSs run on more powerful hardware, often with multiple CPUs and aredesigned to be accessed by many users in a shared fashion simultaneously.

UnixOriginally developed at AT&T Bell Laboratories, Unix is a 32-bit, multitasking,multiuser OS, which is portable to multiple brands of hardware systems. Origi-nally, it was developed as an open alternative to proprietary minicomputerOSs. Today, Unix can be found on most complex instruction set computer(CISC) and reduced instruction set computer (RISC) CPUs, including IntelPentium and 80xxx, Motorola 68xxx and Sun SPARC.

Gartner Dataquest subsegments software running on the Unix OS into the fol-lowing categories of Unix:

■ Sun Solaris

■ IBM AIX

■ HP-UX

■ Other Proprietary Unix

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LinuxLinux is an open source version of Unix. Linus Torvalds developed the originalOS kernel at the University of Helsinki. There are several windowing interfaceshells that run on top of Linux, including K Desktop Environment (KDE) andGNU Network Object Model Environment (GNOME). There are many distri-butions of Linux. The most popular ones include those of Red Hat, SuSe andMandrake. Linux and the MacOS are the only two types/brands of Unix plat-forms that the Gartner Dataquest software group reports separately for thebusiness applications, PC applications and infrastructure applications we track.

iSeries (OS/400)This is IBM's operating system for its AS/400-series, now called the e-serveriSeries computers. This is often called a legacy OS and is sometimes considereda mainframe OS, although it is really a minicomputer OS.

zSeries (OS/390)These are IBM's OS for System 390 mainframe and e server zSeries computers.Older versions and product names included here are MVS, virtual memory(VM) and OS/390. These are server OSs; these are often called mainframe orlegacy OSs.

■ Plug-compatible manufacturer (PCM) — A PCM is a peripheral equipmentmanufacturer that makes compatible plug-in devices that can be used inter-changeably among different computers. PCMs, such as Amdahl or HitachiData Systems, ship computers with an OS that is compatible with IBM's VMor MVS. Today, this is trivial on a worldwide basis. But it is included here.

Windows DesktopMicrosoft's Windows desktop operating environment are targeted and pricedfor the consumer and enterprise buyers. These are all considered client OSseven though products such as Windows NT Workstation can run in client-server mode. This category includes all Windows desktop products including16-bit products, such as Windows 1.x, 2.x, 3.x and Windows for Workgroups,as well as 32-bit products, such as Windows 95, 98, ME, XP Home, WindowsNT Workstation, Windows 2000 Professional and XP Professional. These are allconsidered client OSs even though products, such as Windows NT Worksta-tion, can run in client-server mode.

Windows ServerThese are Microsoft's 32-bit server operating environments for more powerfulhardware platforms, including multiprocessor platforms and include network-ing and sharing features not found in Windows client OSs. Products hereinclude NT Server and the Windows 2000 Server family.

Other OSAny operating environment software platform not included in other categories,such as NetWare, OS/2, DOS, Mac OS, VMS, Embedded OS and Other OS

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Chapter 8Platforms

Market share data are collected by the following platforms as appropriate:

■ Java

■ .NET

JavaThe term "Java" can be applied to Sun's Java platform or to its Java program-ming language. The Java platform is made up of a set of technologies that pro-vide cross-platform, network-centric computing solutions. The programminglanguage is simply one aspect of the Java platform. The elements of the Javaplatform include: the Java Virtual Machine (JVM), which provides a uniformJava byte code emulator for Java's cross-platform run time environment; theJava programming language, which provides a robust, object-orientedlanguage for constructing Java components and applications; and the standardJava class library packages, which provide sets of reusable services that pro-mote consistency among components and applications.

The Java programming language is based on C and extends and complementsthe basic capabilities of HTML. Java permits the creation of applications andapplication modules (called "applets") that run in the JVM on the browser.Browsers from Netscape and Microsoft have a JVM. Java's platform indepen-dence and security are designed in, rather than added on, so applications canrun on a wide variety of desktop platforms as long as they can run a Java-enabled browser.

.NETAt its core, .NET represents Microsoft's implementation of the Web servicesconcept, which treats software as a set of services accessible over ubiquitousnetworks using Web-based standards and protocols, although Microsoft hasbroadly applied the .NET moniker to several independent technologies and ini-tiatives that have little to do with Web services (for example, .NET EnterpriseServers).

As a software infrastructure, .NET consists of two programming models:

■ A Web services programming model, which exposes programming inter-faces through Internet standards. This loosely coupled model uses HTTPand other Internet protocols as the main underlying transport mechanisms,and also uses Extensible Markup Language (XML), Simple Object AccessProtocol (SOAP), Web Services Description Language (WSDL) and UniversalDescription, Discovery and Integration (UDDI). Initially, most of this modelwill use a request/reply communications style.

■ A system programming model designed to supersede Microsoft's COM andthe Windows application programming interfaces over the long term. Thismodel introduces a new set of fundamental classes and a new run timeenvironment — the Common Language Runtime (CLR) — providing anobject-oriented class hierarchy structure as part of the application runtimeenvironment. It also provides classes and mechanisms that enable programsto be "wrapped" as Web services, so it can ease — but is not required for —Web services development.

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Chapter 9Worldwide Geographic Regional Definitions

Market Share data are collected by the following regions and countries identi-fied as "Countries of Specific Interest." Note that Software Vendor Revenueresearch does not yet cover all these countries. "Rest of…." indicates the balanceof data for that region.

Asia/Pacific Region

Countries of Specific InterestAustralia, China, Hong Kong, India, Indonesia, South Korea, Malaysia, NewZealand, Philippines, Singapore, Taiwan, Thailand and Vietnam

Rest of Asia/PacificAmerican Samoa, Ashmore and Cartier Islands, Baker Island, Bangladesh,Bhutan, Bouvet Island, Brunei, Cambodia, Christmas Island, Cocos (Keeling)Islands, Cook Islands, Coral Sea Islands, Federated States of Micronesia, Fiji,French Polynesia, Guam, Howland Island, Jarvis Island, Johnston Atoll,Kingman Reef, Kiribati, Laos, Macau, Maldives, Marshall Islands, MidwayIslands, Mongolia, Myanmar (Burma), Nauru, Nepal, New Caledonia, Niue,Norfolk Island, Northern Mariana Islands, North Korea, Pakistan, Palau,Palmyra Atoll, Papua New Guinea, Paracel Islands, Pitcairn Islands, SolomonIslands, Spratly Islands, Sri Lanka, Tokelau, Tonga, Tuvalu, Vanuatu, WakeIsland, Wallis and Futuna, and Western Samoa

Western Europe Region

Countries of Specific InterestAustria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and UnitedKingdom

Rest of Western EuropeAndorra, Cyprus, Faroe Islands, Gibraltar, Greenland, Guernsey, Iceland, Isleof Man, Jersey, Liechtenstein, Luxembourg, Malta, Monaco, San Marino, andSvalbard

Central/Eastern Europe Region

Countries of Specific InterestBaltics (Estonia, Latvia, Lithuania), Belarus, Bulgaria, Czech Republic,Hungary, Poland, Romania, Russia, Slovakia, and Ukraine

Rest of Eastern EuropeAlbania, Armenia, Azerbaijan, Bosnia and Herzegovina, Croatia, Georgia,Kazakhstan, Kyrgyzstan, Macedonia, Moldova, Slovenia, Tajikistan,Turkmenistan, Uzbekistan, and Yugoslavia (Serbia and Montenegro)

Japan Region

Countries of Specific InterestJapan

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Latin America Region

Countries of Specific InterestArgentina, Brazil, Chile, Colombia, Mexico, Peru, Puerto Rico, and Venezuela

Rest of Latin AmericaAnguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bermuda,Bolivia, Cayman Islands, Clipperton Island, Costa Rica, Cuba, Dominica,Dominican Republic, Ecuador, El Salvador, Falkland Islands (Islas Malvinas),French Guiana, Grenada, Guadeloupe, Guatemala, Guyana, Haiti, Honduras,Jamaica, Martinique, Montserrat, Navassa Island, Netherlands Antilles,Nicaragua, Panama, Paraguay, Saint Kitts and Nevis, Saint Lucia, Saint Vincentand the Grenadines, Suriname, Tortola (British Virgin Islands), Trinidad andTobago, Turks and Caicos Islands, Uruguay, Virgin Islands (St. John, St. Croixand St. Thomas)

Middle East and Africa Region

Countries of Specific InterestIsrael, Turkey and South Africa

Rest of Middle East and AfricaAfghanistan, Algeria, Angola, Bahrain, Bassas da India, Benin, Botswana,Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic,Chad, Comoros, Congo, Cote d'Ivoire, Djibouti, Egypt, Equatorial Guinea,Eritrea, Ethiopia, Europa Island, Gabon, Gambia, Ghana, Glorioso Islands,Guinea, Guinea-Bissau, Iran, Iraq, Jordan, Juan de Nova Island, Kenya, Kuwait,Lebanon, Lesotho, Liberia, Libya, Madagascar, Malawi, Mali, Mauritania,Mauritius, Mayotte, Morocco, Mozambique, Namibia, Niger, Nigeria, Oman,Qatar, Reunion, Rwanda, Saint Helena, Sao Tome and Principe, Saudi Arabia,Senegal, Seychelles, Sierra Leone, Somalia, Sudan, Swaziland, Syria, Tanzania,Togo, Tromelin Island, Tunisia, Uganda, United Arab Emirates, WesternSahara, Yemen, Zaire, Zambia, and Zimbabwe.

North America Region

Countries of Specific InterestCanada and United States

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Chapter 10Research Metrics

The following describes the research metrics Gartner Dataquest uses for report-ing market revenue, market size and market share. Not all of these metrics areused by every software program or by every software segment tracked within aprogram. Some may have more of these metrics and some may have fewer.

Compound annual growth rate (CAGR) —The annualized average rate ofrevenue growth between two given years, assuming growth takes place at anexponentially compounded rate. The CAGR between given years X and Z,where Z - X = N is the number of years between the two given years, is calcu-lated as follows:

CAGR, year X to year Z = [(value in year Z/value in year X) ^ (1/N)-1]

For example, the CAGR for 2002 to 2007 is calculated as follows:

CAGR, 2002 to 2007 (X = 2002, Z = 2007, N = 5) = [(value in 2007/value in 2002) ^(1/5)-1]

Revenue — The gross sales generated by a vendor, measured in unit currency

Vendor — A vendor is the last entity in the chain that brands a product andsells it either directly to end-users or through a channel. A vendor may designand manufacture its own products, assemble complete systems from compo-nents produced by others, or procure products from an OEM or contract manu-facturer. A vendor may also provide services, maintenance or non-maintenancefor its own products or for other vendors' products and may also provideservices for IT technologies.

Vendor license revenue — That revenue of a manufacturer or vendor that isgenerated by sales of new software licenses. It excludes revenue from softwaremaintenance, support and professional services. It also excludes the sale ofproducts manufactured by other vendors.

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Chapter 11Exchange Rates

Gartner Dataquest also gives due consideration to the impact of exchange rateson its forecasts. Gartner Dataquest generally compiles its worldwide forecastsfrom individual region-level forecasts. These regional level forecasts are, inturn, frequently compiled from country-level forecasts, each of which are sub-ject to the vagaries of the local exchange rate. For the sake of consistency anduniformity, Gartner Dataquest uses the U.S. dollar as a common currency forall comparisons and aggregations. As a rule, Gartner Dataquest analysts reckontheir forecasts in local currency and then converts them to U.S. dollars usingprojected exchange rates. Gartner Dataquest does not forecast exchange rates.

Instead we project rates into the future based on the latest available monthlyexchange rate at the time our quarterly market sizing study begins.

Table 11-1 presents the exchange rates assumed in this forecast. These rates arebased on monthly exchange rates observed through January 2004. Additionalinformation about historical exchange rates and Gartner Dataquest's methodfor projecting future rates may be requested through Gartner Dataquest's clientinquiry service.

Table 11-1Prevailing Annual Exchange Rates, 2000-2002 (Foreign Currency per U.S. Dollar)

Country 2000 2001 2002

ForeignCurrency

Appreciation2001-2002 (%)

North America

Canada (Dollar) 1.49 1.55 1.57 -1.37

Latin America

Argentina (Peso) 1.00 1.00 3.15 -68.28

Brazil (Real) 1.83 2.35 2.92 -19.51

Chile (Peso) 539.56 635.41 689.45 -7.84

Colombia (Peso) 2,090.06 2,300.68 2,507.63 -8.25

Mexico (Peso) 9.46 9.34 9.67 -3.35

Peru (New Sole) 3.49 3.51 3.52 -0.29

Venezuela (Bolivar) 680.47 724.34 1,161.31 -37.63

Western Europe

Austria (Schilling) 14.94 15.38 N/A N/A

Belgium (Franc) 43.81 45.08 N/A N/A

Denmark (Krone) 8.09 8.33 7.89 5.56

Economic and Monetary Union (ECU/Euro) 1.09 1.12 1.06 5.30

Finland (Markka) 6.46 6.64 N/A N/A

France (Franc) 7.12 7.33 N/A N/A

Germany (Mark) 2.12 2.19 N/A N/A

Greece (Drachma) 365.86 380.77 N/A N/A

Iceland (Krona) 78.88 97.74 91.55 6.76

Ireland (Punt) 0.86 0.88 N/A N/A

Italy (Lira) 2,102.77 2,163.67 N/A N/A

Netherlands (Guilder) 2.39 2.46 N/A N/A

Norway (Krone) 8.81 8.99 7.99 12.62

Portugal (Escudo) 217.72 224.03 N/A N/A

Spain (Peseta) 180.69 185.93 N/A N/A

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Sweden (Krona) 9.18 10.34 9.72 6.38

Switzerland (Franc) 1.69 1.69 1.56 8.41

United Kingdom (Pound) 0.66 0.69 0.67 4.18

Central and Eastern Europe

Bulgaria (Lev) 2.10 2.18 2.07 5.21

Czech Republic (Koruna) 38.63 38.02 32.70 16.25

Hungary (Forint) 282.16 286.46 257.65 11.18

Poland (Zloty) 4.34 4.09 4.08 0.31

Romania (Lev) 21,422.64 28,900.57 32,912.90 -12.19

Russia (Ruble) 27.97 29.09 31.39 -7.32

Slovakia (Koruna) 46.21 48.33 45.24 6.83

Ukraine (Hryvna) 5.48 5.38 5.50 -2.14

Japan

Japan (Yen) 107.82 121.52 125.27 -2.99

Asia/Pacific

Australia (Dollar) 1.73 1.94 1.84 5.15

China (Yuan) 8.28 8.28 8.28 -0.05

Hong Kong (Dollar) 7.79 7.80 7.80 0.00

India (Rupee) 45.00 47.23 48.62 -2.87

Indonesia (Rupiah) 8,373.70 10,189.44 9,321.51 9.31

Malaysia (Ringgit) 3.80 3.80 3.80 0.00

New Zealand (Dollar) 2.20 2.38 2.15 11.02

Philippines (Peso) 44.26 51.01 51.62 -1.19

Singapore (Dollar) 1.72 1.79 1.79 0.09

South Korea (Won) 1,131.38 1,291.67 1,250.49 3.29

Sri Lanka (Rupee) 76.98 89.62 95.76 -6.41

Taiwan (Dollar) 31.27 33.83 34.54 -2.07

Thailand (Baht) 40.22 44.51 43.03 3.43

Rest of World

Egypt (Pound) 3.53 4.04 4.62 -12.61

Israel (New Shekel) 4.08 4.21 4.74 -11.17

South Africa (Rand) 6.95 8.63 10.52 -18.00

Turkey (Lira) 624,177.48 1,204,238.09 1,514,163.64 -20.47

Notes: Effective 1 January 2002, euro became common currency of Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy,Netherlands, Portugal, and Spain.Effective May 2003, Ukranian Hrynva exchange rate no longer available.Source: Gartner Dataquest (July 2003)

Table 11-1 (Continued)Prevailing Annual Exchange Rates, 2000-2002 (Foreign Currency per U.S. Dollar)

Country 2000 2001 2002

ForeignCurrency

Appreciation2001-2002 (%)

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Chapter 12Vertical Market and Company Size Segments

Sources of software revenue, where analyzed, will be segmented into the pri-mary vertical markets in Table 12-1. ISIC is the International Standard IndustryCode. Standard Industrial Code (SIC) is the SIC code in wide use in the UnitedStates. NAICS are the emerging North American standards. Company size seg-mentation is shown in Table 12-2.

In our demand-side research, we will be seeking to segment by organization/company size using the criteria shown in Table 12-1.

Table 12-1Vertical Market Segmentation

Primary Segment Secondary Segment Additional Description ISIC U.S. SIC NAICS

Agriculture, Miningand Construction

Agriculture Agriculture, forestry and fishing 1-9 1-9 11

Mining Mining of coal, petroleum, gas,metal, minerals

10-14 10-14 12

Construction Construction and contractors 45 15-17 23

ProcessManufacturing

Pharmaceutical andmedicine

Pharmaceuticals, medicinalchemicals and botanical products

2423 2833-2835 3254

Chemical, plastics andrubber

Chemicals, plastics, rubber,minerals

2421, 2422,2424, 2429,25

30: 2812-2824, 2836-2899

3251, 3252,3253, 3255,3256, 3259,326, 327

Petroleum, coal 23 29 324

Textiles and apparel Textiles, apparel, leather 17, 18, 19 22, 23, 31 313,314,315,316

Metal, wood, minerals,paper, printing,publishing

Newspaper, book, periodicalpublishers, paper and printing,wood, minerals, stone, clay, glass,primary metals

20, 23, 22,26, 27

24, 25, 27,32, 33

51111-3,51119322, 323331, 332

Consumables Food, beverages and tobacco 15-16 20-21 311, 312

DiscreteManufacturing

Transportationequipment

Transportation equipment (motorvehicles, aerospace, rail, ship)

34, 37 37 336

Computer and electronicproducts

Computers, office, electronic andcommunication equipment,semiconductors

30, 31, 32. 36 334

Industrial and electricalequipment

Industrial and commercialmachinery

29 35 333335

Medical equipment andsupplies

Medical, optical, industrialmeasuring and controlling, andscientific equipment andinstruments, photographic,watches and clocks

33 38 3391

Other discretemanufacturing

Fabricated metal, furniture,recycling, miscellaneousmanufacturing

28, 36, 37 25, 34, 39 332337

Utilities Electric and gas Electric, gas, steam 40 4911-4939,4961

2211

Water Water and sewer systems 41 4941-4959 *2213

Wholesale Wholesale durable andnondurable goods

51 50-51 42

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Retail General retailers Non-specialized stores 521 53 452

Specialty retailers Specialty stores include buildingmaterials, hardware, automotive,fuel, apparel, furniture,miscellaneous and nonstore

50, 523,524, 525:

52, 55, 56,57, 59

441-444446-451,453, 454

Grocery Food, beverage and tobaccostores

522 54 445

Restaurants and hotels 551, 552 58, 70 72

Transportation Rail and water 601, 61 40, 44 482,483

Motor freight Truck, transit, sightseeing 602 41, 42 484,485,487

Air transport 62 45 481

Pipelines Pipelines, except natural gas 603 46 486

Warehousing, couriersandsupport services

Transportation support activities,postal, couriers, warehousing

63, 641 47, 4221-4226, 43,4513, 4215

488, 491,492, 493

Communications Wireless *642 4812 51332

Wireline *642 4813, 4822 51331

Satellite and othercommunications

*642 4988 51333

Broadcasting and cable Radio, TV, cable broadcastingand distribution

*642 4832, 4833,4842

5131,5132

Financial Services Banking Monetary authorities — centralbanks, credit intermediation

65 60, 61, 67 521-522

Securities Security and commodity brokers 67 62 523, 525

Insurance (other thanhealth)

Insurance carriers and agents *66 *63, 64Insurance

*524

Health insurance (payer) Insurance carriers and agents *66 *63, 64 *524

Healthcare Healthcare provider Doctor, nursing, dental andclinical offices; medical anddental laboratories; hospitals andother health and allied services

851, 852 80 621-623

Services Software publishers Supplier in ISIC softwareconsultancy and supply segment

723 7372 5112

IT Service providers IT service providers exceptsoftware publishers

72 7371, 7373-7379, 8742

*541

Professional, scientificand technical servicesexcept IT

Legal, accounting, design,engineering, management,scientific, advertising, andtechnical services except IT

73, 741-743 7311, 81,83, 87except8742

*541

Real estate Real estate, rental, leasing 70 65 53

Business and consumerservices

Motion picture, video, audiorecording; Information servicesand data processing; holdingcompanies; business and buildingsupport; employment, travel,security; arts, entertainment,recreation (performances, sports,museums); personal and repairservices; religious, civic andmembership organizations

90-93, 71,526, 749,853

7322-7363,7381-7389,75-79, 83-86, 88, 89

624, 51251455567181

Education Primary and secondary Primary and secondary schools 801, 802 8211 6111

Higher education Colleges, professional, other 803, 809 8221, 8222-8299

6113,6116

Table 12-1 (Continued)Vertical Market Segmentation

Primary Segment Secondary Segment Additional Description ISIC U.S. SIC NAICS

Vertical Market and Company Size Segments 57

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

In our demand-side research, we will be seeking to segment certain segmentsby organization/company size using the criteria shown in Table 12-2.

National and Defense and intelligence National defense and intelligence 7522 *90 *92

InternationalGovernment

Civil National government excludingdefense

*75 *90 *92

Local and RegionalGovernment

Local and regionalgovernment

Local, provincial, state, regionalgovernment

*75 *90 *92

*Partial matchSource: Gartner Dataquest (December 2003)

Table 12-2Company Size Segments

Primary Cut Optional, Secondary

SMB Head Count Turnover

Very Small/SOHO 1-19

Small 20-99 Less than $49.9 million

Low-End MSB 100-499

High-End MSB 500-999 $50 million-249 million

Large Business

Large 1,000-2,499 $250 million-$999 million

Very Large 2,500-4,999 $1 billion-$2.49 billion

Mega 5,000 or More More than $2.5 billion

Source: Gartner Dataquest (December 2003)

Table 12-1 (Continued)Vertical Market Segmentation

Primary Segment Secondary Segment Additional Description ISIC U.S. SIC NAICS

58 Software Market Research Methodology and Definitions, 2003-2004

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©2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 59

Chapter 13Channel Definitions

This section describes the channel definitions used by Gartner Dataquest. Oursoftware distribution channel research is intended to cover at least the two topsegments. Definitions are as follows:

■ Direct channel — This is a channel through which hardware, software andperipherals are sold by the manufacturer directly to the end user.

❑ Direct sales force — This is a channel through which products movedirectly from the manufacturer or vendor to the end user, usually by aprofessionally trained field sales force.

❑ Direct fax/phone/Web — This is a channel through which manufacturerssell their own products directly to end users through the use of the tele-phone, Web, fax, fax back and mail, including e-mail and catalog.

❑ Direct retail — These are storefront operations owned and managed bythe vendor, typically a manufacturer of computer systems. Direct storesare more common in Europe and Japan than in other parts of the world.Sales through direct stores are not reported separately by GartnerDataquest's worldwide services. They are grouped under direct sales forceor one of the indirect channels.

■ Indirect channel — This is a channel through which independent third-partyorganizations resell products. In software markets, value-added resellers(VARs) and systems integrators (SIs) are two typical examples of the indirectchannel.

❑ Dealer — This is a group of resellers including independent, regional andnational organizations that normally sell products and services to thebusiness, education and government sectors. Client meetings are typicallyscheduled ahead of time and are most often solicited by an outboundsales force. Dealers usually provide a low level of service, training andcustomer assistance, and other value-added services.

❑ Vendor-specific agent — This is a reseller dedicated to selling one ven-dor's products. The reseller store will carry the logo and products of thatvendor but is not owned by the vendor (for example, some Xerox copierresellers in the United States).

❑ Indirect fax/phone/Web — This is a channel through which resellers sella variety of products to end users through the use of the telephone, Web,fax, fax back and mail, including catalog sales. This is different from thedirect fax/phone/Web channel in that the products are sold by resellersrather than direct from the vendor.

❑ VAR — This is a reseller that usually is not a storefront operation and typ-ically acts as a consultant to clients. To qualify as a VAR, a reseller musthave developed or configured some type of software package targeted at aparticular market or offer significant integration expertise to the customer.

❑ VARs typically generate 40 percent or more of their revenue from customproducts, service and support. VARs do not apply their label to the prod-uct and may, or may not own the hardware or software.

❑ Systems integrators — These are system vendors and independent serviceproviders that supply professional services to apply, migrate and inte-grate technology into business processes.

❑ Hosting and ASPs — These offer access to software over a network andmay, or may not, include customization services.

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©2004 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 61

Appendix AGlossary of Terms

Table A-1 lists the definitions of the acronyms and abbreviation used in thisreport.

Table A-1Report Glossary

Acronym/Abbreviation Definition

1:m one-to-many

3GL third-generation language

4GL fourth-generation language

ABC activity-based cost

ACD automatic call distributors

AD application development

ADK adapter development kits

AEC architectural, engineering and construction

AIM application integration and middleware

API application programming interface

APS application platform suite

ASP application service provider

B2B business-to-business

B2C business-to-consumer

BAM business activity monitoring

BI business intelligence

BOM bill of materials

BPA business process analysis

BPM business process management

BPR business process re-engineering

BRE business rules engine

BSP business service provider

CAD computer-aided design

CAE computer-aided engineering

CAGR compound annual growth rate

CAM computer-aided manufacturing

CD content distribution

CISC complex instruction set computer

CLR Common Language Runtime

CM configuration management

CMMS computer(ized) maintenance management system

COM Component Object Model

CORBA Common Object Request Broker Architecture

CPM corporate performance management

CRM customer relationship management

CRO customer relationship optimization

CSD consolidated service desk

CTI computer telephony integration

DBA database administrator

DBMS database management system

DTM desktop management

EAI enterprise application integration

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EAM enterprise asset management

EAS enterprise application suite

EBIS enterprise business intelligence suites

EDA electronic design automation

EDI electronic data exchange

EJB Enterprise JavaBeans

ENS entrprise nervous system

ERM employee relationship management

ERMS electronic records management system

ERP enterprise resource planning

ESD electronic software distribution

ETL extraction, transformation and loading

FASB Financial Accounting Standards Board

FMS financial management system

GAAP generally accepted accounting principals

GNOME GNU Network Object Model Environment

GUI graphical user interface

HCM human capital management

HRMS human resources management system

ID identification

IDE integrated development environment

IDL Interface Definition Language

IDM intelligent device management

IDS intrusion detection system

IPS integrated plant system

ISE integrated services environments

ISIC International Standard Industry Code

ISV independent software vendor

ITSD IT service desk

IVRU integrated voice response unit

J2EE Java 2 Enterprise Edition

JMS Java Message Service

JVM Java Virtual Machine

KDE K Desktop Environment

m:1 many-to-one

m:mn many-to-many

MIPS million instructions per second

MOM message-oriented middleware

MQ message queuing

MRO maintenance, repair and overhaul

MRP manufacturing resource planning

MSB midsize business

MVS Multiple Virtual System

N/A not available

NAICS North American Industry Code Standards

NSM network and systems management

ODBC open database connectivity

OEM original equipment manufacturer

Table A-1 (Continued)Report Glossary

Acronym/Abbreviation Definition

Channel Definitions 63

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

OLAP online analytical processing

OLTP online transaction processing

OMS order management system

OOA&D object-oriented analysis and design

OODBMS object-oriented DBMS

ORB object request broker

OS operating system

OTM object transaction monitor

PCM plug-compatible manufacturer

PCS plant control system

PDM product data management

PKI public key infrastructure

PLM project life cycle management

PMBOK Project Management Book of Knowledge

POS point of sale

PPM professional project management

PRM partner relationship management

QA quality assurance

RDBMS relational DBMS

RF radio frequency

RFP request for proposal

RFQ request for quote

RISC reduced instruction set computer

RPC remote procedure call

SAP BW SAP's Business Warehouse

SCCM software change and configuration management

SCE supply chain execution

SCIV supply chain inventory visibility

SCM supply chain management

SCP supply chain planning

SCS supply chain sourcing

SEC Securities and Exchange Commission

SI system integrator

SIC Standard Industrial Code

SMB small and midsize business

SOA service-oriented architecture

SOAP Simple Object Access Protocol

SODA services-oriented development of applications

SOHO small office/home office

SQL System Query Language

SRM supplier relationshp management

SSO single sign-on

SWCM software configuratin management

TMS transportation management system

TPM transaction processing monitor

UDDI Universal Description, Discovery and Integration

UML Unified Modeling Language

URL uniform resource locator

Table A-1 (Continued)Report Glossary

Acronym/Abbreviation Definition

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US SIC United States' Standard Industry Code

VAR value-added reseller

VM virtual memory

VPN virtual private network

WMS warehouse management system

WSDL Web Services Description Language

XML Extensible Markup Language

Source: Gartner Dataquest (December 2003)

Table A-1 (Continued)Report Glossary

Acronym/Abbreviation Definition