EAM Market Poised for Growth Through 2007

Transcription

1 Research Brief EAM Market Poised for Growth Through 2007 Abstract: The extranet access management market grew sluggishly in 2002, with the top four revenue leaders accounting for almost 80 percent of the market. EAM projects are resuming, and the market will see 15 percent growth through By Norma Schroder and Ray Wagner Recommendations EAM vendors must move swiftly to supply Security Assertions Markup Language (SAML) and Services Provisioning Markup Language (SPML) capability in their next versions to remain competitive. This will become a check-box item. Smaller EAM vendors should consider supplying EAM to application server vendors and enterprise application vendors on an original equipment manufacturer (OEM) basis. EAM vendors must add value, lower complexity and offer a more complete and preintegrated identity and access management solution. They must solidify or initiate "suite" partnerships with user provisioning (UP) vendors and directory vendors. Enterprises desiring to capture the EAM benefits of lower costs of development and lower costs of identity management should consult the EAM Magic Quadrant. They should take into consideration a vendor s market standing but should realize it is only one of several factors in their decision process. Publication Date:4 November 2003

2 2 EAM Market Poised for Growth Through 2007 Introduction Extranet access management (EAM) software was a $257.2 million market in Annual growth dipped sharply from 2001 to 2002 to just 3 percent. The economy severely slowed Web application development projects and rollouts in 2002, and EAM projects were no exception (see " Web Services Development, North America," SWSI-WW-UW-0001). Gartner tracks 13 product vendors in this space and believes that there may be an equal number of small revenue vendors in advanced countries and regions, such as Europe, Japan, South Korea or Australia. Gartner 's market size estimate includes estimates for all sources of these vendors' EAM revenue: EAM license, EAM maintenance and support, and EAMrelated professional services. In Figure 1, the sharp slackening of total market growth into 2002 is clearly visible. Also, the typical recessionary rise in maintenance and professional services to almost 50 percent of EAM vendors' revenue in 2002 is apparent. Figure 1 EAM Market Revenue Components, Millions of Dollars Professional Services Maintenance License Source: Gartner Dataquest (October 2003) 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 4 November 2003

3 Not included in this estimate of the EAM market is revenue from thirdparty professional EAM implementation and customization services, such as from Electronic Data Systems (EDS), PricewaterhouseCoopers (PWC) or IBM's global business services (GBS) unit. Gartner believes the revenue to service professionals from EAM to be about one-half to two times the license revenue of this market, or almost $75 million to $300 million. That means end-user spending on external suppliers of EAM was between $325 million and $500 million. EAM buyers that don't use a service provider but rely on EAM vendor services and their own in-house architects and developers may spend two to five times the license cost in terms of their own labor, depending on the complexity of goals. 3 Market Revenue Share Leaders IBM is the revenue leader with a 38 percent market share, virtually unchanged from Among the pure plays, Netegrity is the revenue leader with a 22 percent market share in Oblix, an EAM pure play, and Entrust, a public key infrastructure (PKI) vendor that is trying to transform itself, are even in terms of market share and about half the revenue size of Netegrity in These top four account for almost 80 percent of the market revenue. Netegrity was the largest of the four EAM vendors to actually experience a revenue contraction in The recession is not necessarily to blame. Netegrity had entered the portal market in 2001 with the acquisition of DataChannel, just as the portal market was quickly consolidating around large software stack vendors. Gartner believes Netegrity is to be commended from quickly recognizing its mistake and disposing of the portal without side effects on its EAM installed base. Netegrity remains the most favorably positioned in the Gartner Magic Quadrant (see "Magic Quadrant for Extranet Access Management, 2H03," M ). Entegrity, Novell, OpenNetwork, RSA Security and Sun all had revenue shares under 5 percent. The company with the strongest growth rate in the EAM market (over 100 percent) was RSA Security, but this was off a very small base. Other EAM vendors include Hewlett-Packard, SecureComputing and Wipro, as well as smaller regionally known providers. Installed Base Leaders Gartner estimates there are between 2,500 and 4,000 EAM customers worldwide. We believe there are almost 600 million EAM seats under maintenance worldwide. IBM and Novell are estimated to have the greatest number of customers, but Netegrity has the largest seat base, holding about half of the base of seats. These numbers suggest that Netegrity focuses its marketing and sales on the largest customers with the largest "megaseat" projects. Novell and IBM appear to be extensively crossselling among their large base of loyal customers and tying EAM to WebSphere or e-directory projects. This means a larger number of projects at a smaller scale for these two vendors. (This is not to say there is a 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 4 November 2003

4 4 EAM Market Poised for Growth Through 2007 technical difference in scalability of these products, only in the scale of their average EAM deal.) EAM Market Forecast 2003 Through 2007 The total EAM market is expected to grow from about $250 million in 2002 to just over $500 million by 2007, at a five-year compound annual growth rate (CAGR) of 15 percent. EAM Market Inhibitors Inhibitors to EAM market growth include: Web services projects and EAM projects are still highly complex, which limits their uptake. If software stack vendors, including Microsoft, embed EAM functionality into their existing products (applications servers, operating systems and others), the stand-alone EAM market would quickly become a niche market. Secure Sockets Layer (SSL) virtual private network (VPN) equipment, which offers some administration, authorization and authentication (AAA) functions for remote Web access, is becoming at least a partial substitute for EAM, in some cases. EAM Market Accelerators Accelerators to EAM market growth include: As the recession fades, large extranet and Web services application projects, including EAM projects, will resume and new ones will get approved. Next versions of leading EAM products will include support of the recently finalized SAML standards and perhaps also support Liberty or Web Services Federation Language, increasing the benefits of information asset management (IAM) for extranet use, driving more demand. As EAM and user provisioning products converge into the "IAM suite," Gartnerexpectsbroaderadoption. New regulations, such as Sarbanes-Oxley, will drive incremental demand as will the more complex threat environment. Growing C-level interest in reaping cost savings from EAM through lower Web development costs and lower ongoing user provisioning and entitlement management costs will increase demand. Gartner Dataquest Recommendations Gartner Dataquest recommends the following: EAM vendors must move swiftly to supply SAML and SPML capability in their next versions to remain competitive. This will become a checkbox item Gartner, Inc. and/or its Affiliates. All Rights Reserved. 4 November 2003

5 Smaller EAM vendors should consider supplying EAM to application server vendors and enterprise application vendors on an OEM basis. EAM vendors must add value, lower complexity and offer a more complete and pre-integrated identity and access management solution. They must solidify or initiate suite partnerships with UP vendors and directory vendors. Enterprises desiring to capture the EAM benefits of lower costs of development and lower costs of identity management should consult the EAM Magic Quadrant. They should take into consideration a vendor s market standing but should realize it is only one of several factors in their decision process. Key Issue What client issues should Gartner research address? Gartner, Inc. and/or its Affiliates. All Rights Reserved. 4 November 2003

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