Project and Portfolio Management Software Market Continues Growth in 2012

For the third year in a row, Gartner analysts reported that project and portfolio management (PPM) software exhibited impressive growth. This growth is in terms of revenues and markets. In a Gartner Newsroom article, they presented a table showing PPM spending by vendors, identifying the top 5 companies and grouping the rest, 2012 revenues in millions of dollars, percent market share, 2011 revenues, and the corresponding percent growth from 2011 to 2012. This comparative table shows that total revenue grew by 11 percent, from 1.48 billion dollars in 2011 to 1.65 billion dollars in 2012.

The Top 5

It can also be seen from this table that the first spot belongs to Oracle, followed by Microsoft, and then by CA Technologies. Fourth and fifth places are occupied by Planview and HP, respectively. It is interesting to note that the 2012 revenues of only the top 5 vendors already compose about 57% of the total 2012 PPM software revenue. The highest percent revenue growth at 14% came from HP. However, Laurie Wurster, Gartner’s research director, stated that the three companies occupying the highest positions will probably remain on their spots, unless there are major company acquisitions to happen.

Key Movements and Winning Strategies

Indeed, company partnering and acquisition seem to characterize mostly what happened in 2012. Oracle was able to retain the top spot, possibly with the help of its purchase in November 2012 of Instantis, a leading provider of cloud-based and on-premise PPM solutions. Vendors also explored new sales beyond North America and Western Europe, where growth was smaller compared to other regions such as Latin America, Eastern Europe, Asia, North Africa, and the Middle East. Venturing into these regions by having new partners with a strategic business model is a good formula for growth. Moreover, vendors focused more on innovation such as new product releases and improving packaging and delivery options through software-as-a-service (SaaS). In contrast, PPM vendors focused more on integration of their products in 2011.

Driving Factors for Growth

Ms. Wurster observed that the PPM software market grew in spite of a slow economy and belt-tightening of customers, especially with their IT budget. Perhaps, it is because of such factors that companies are trying to use tools that will help them manage and optimize their project resources. The stagnant economy in North America and Western Europe is bringing about different user requirements, for which vendors react by transforming themselves and expanding their product lines, merging or acquiring companies, or going instead into new and emerging markets in different regions. In these regions, there are more companies buying the software for the first time than in the developed markets.

A Continuing Trend

Despite the increasing interest and activities in emerging markets, 90 percent of revenues of PPM software still come from developed markets. The difference is that instead of first-time buyers, developed markets are updating their software or changing what they are using. Companies, both from emerging markets and mature economies, still need better tools and solutions to remain efficient and competitive. And with a slowly improving economy, it is certain that spending will continue for PPM software and solutions.

About Gartner, Inc.

More about PPM trends will be tackled at the PPM and IT Governance Summit of 2013 by Gartner. Interested parties may visit the Gartner website for schedule and reservation. Gartner, Inc. is an information technology research and advisory firm delivering technology-related insights to its clients.

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Jose Maria Delos Santos

Jose is a subject matter expert and member of the writing team for Project-Management.com and Bridge24. He has written hundreds of articles including project management software reviews, books reviews, training site reviews, and general articles related to the project management industry.