Market Share Analysis: Performance Analysis Software, Worldwide, 2016
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1 Worldwide, Published: 02 June 2017 ID: G Analyst(s): Federico De Silva Summary The performance analysis software market shifts as point solution providers expand offerings through integrated platforms addressing IT infrastructure, applications, networks and end-user experience. Technology strategic planners must focus on delivering tools for each perspective. Overview Key Findings The combined performance analysis software market grew 13.9% in as demand increased by organizations to support digital business initiatives. Modern and integrated toolsets provide a more holistic view of increasingly dynamic IT infrastructure, including applications, networks and end-user experience. Poor product ease of use has hindered monitoring tool adoption. This is particularly true for older tools that are complex and do not integrate well with the disparate features and functionalities found across many legacy vendors' portfolios. Smaller point-solution providers, such as Datadog, continue to expand their capabilities at the expense of legacy vendors, which are losing share because their solutions are often complex and expensive. The rate of market share decline for incumbent providers (such as BMC, CA Technologies, HP/HPE and IBM) has slowed. A refocus on core markets and reinvestment in reducing product complexity allow them to compete more effectively.
2 Worldwide, Recommendations To exploit performance analysis software market dynamics: Develop use-case scenarios to demonstrate in-depth understanding of the business context and ROI of performance analysis tools for customers and prospects. Focus on application and end-user-centric monitoring tools that are increasingly used across IT domains. Reduce tool complexity by simplifying overly rich product functionality and decreasing the time to value to increase adoption and thus market penetration. Shift the portfolio strategy by rationalizing multiple tools into a platform-based modularized set of mini-suites to combat the growing number of point solutions from smaller vendors. Market Data This section provides software-only market data for the performance analysis market subsegments. These include: Application performance monitoring (APM) tools Algorithmic IT operations (AIOps) platforms, IT infrastructure monitoring (ITIM) tools and other monitoring tools Network performance monitoring and diagnostic (NPMD) tools Data presented here includes software revenue, market share and annual growth rates. For more details about segment and regional definitions, see "Market Definitions and Methodology: Software." Figure 1 provides an overview of the performance analysis market by subsegment, while Table 1 shows software revenue market share for the top 10 named vendors for the combined subsegments. Tables 2 through 4 show software revenue market share for the top 10 named vendors for each subsegment. Figure 1. Performance Analysis Software and Rates by Subsegment, -
3 Worldwide, Source: Gartner (June 2017) Table 3. Top 10 Named Performance Analysis Software Vendors, APM Tools, ed by Software, - (Millions of U.S. Dollars) Change Vendor Dynatrace* IBM New Relic CA Technologies AppDynamics** Riverbed*** HP/HPE
4 Worldwide, Table 3. Top 10 Named Performance Analysis Software Vendors, APM Tools, ed by Software, - (Millions of U.S. Dollars) Change Vendor Splunk Microsoft BMC Others , Total 2, , , *Dynatrace market share data includes Compuware for. **AppDynamics was acquired by Cisco in March ***Riverbed market share data includes Aternity for. Note: Numbers may not add up to totals shown because of rounding. Source: Gartner (June 2017)
5 Worldwide, Overall Market Segment Performance Analysis This research note presents the results of key components of the $23.3 billion IT operations management (ITOM) market, combined under the performance analysis umbrella: APM tools NPMD tools AIOps platforms, ITIM tools and other monitoring tools The combined subsegments grew 13.9% in to $9.1 billion. was driven by the demand for more integrated, modern toolsets that, while masking complexity, provide user-centric performance analysis and action-oriented workflows. Modern IT architectures continue to present significant challenges for IT organizations that have long been structured in silos. These siloed IT organizations have relied on legacy monitoring tools that were designed to work on mostly static environments and monolithic application architectures. Consequently, there has been a need to go beyond the current monitoring practice, where the components have been largely assumed to be fairly constant and the focus has been on specific domains, such as servers, networks and applications. Demand is now shifting toward a more holistic monitoring approach. Infrastructure and operations (I&O) leaders, in addition to emerging software development, DevOps and non-it roles, are seeing the need for better integrated toolsets that provide various teams with a composite view of how their systems are performing. Gartner has characterized these toolsets as "mini-suites," which are complementary sets of tools from vendors focused on specific segments of the ITOM market (see "IT Operations Management 2020: Shift to Succeed" ). With the right product offering and target market and segmentation, providers can reach existing and new buying centers with key value propositions of: Improving collaboration across teams Reducing costs More importantly, supporting digital business initiatives that are focused on customer experience and revenue-generating activities The vendor landscape continues to evolve rapidly along many fronts. There is a lot of new entry activity in the three subsegments of performance analysis, as well as renewed efforts by established vendors, including infrastructure providers, to improve overall monitoring
6 Worldwide, capabilities. Many point-solution or mini-suite providers expect to see a bigger role played by cloud providers, such as Amazon Web Services (AWS), Azure and Google. Cloud providers are expected to move beyond their current focus of providing customers with infrastructure-level monitoring, and expand into new areas, such as APM. Key trends that are affecting the market include: Dynamic infrastructure The focus on faster product development to meet end-user demand is precipitating converged, abstract and dynamic infrastructure that needs to be monitored (containers, software-defined anything [SDx] and so forth). Cloud Organizations are moving to the cloud, whether in the form of software as a service (SaaS)-based apps or infrastructure as a service (IaaS). Consequently, they struggle to have a complete view of their environment. "Shift left" The need to monitor the IT environment through the development and test stages, in addition to production, is gaining traction beyond the traditional buying center of IT operations teams, particularly among development teams. Data growth With the growing volume, variety and velocity of IT infrastructure data, organizations are seeking to make sense of it all. Performance analysis tools can help aid users gain visibility across IT domains. Analytics The paradigm of digital business is redefining the role of IT, creating a deluge of data, while also demanding an agile culture. This necessitates analytic capabilities. With the increasingly modular nature of IT infrastructure, ITIM tools help optimize costs and make operations efficient by capturing, correlating and postprocessing events.
7 Worldwide, Top Vendors Analyzed Selected Key Vendors The following section includes key vendors (listed alphabetically) within the performance analysis software market. They were chosen primarily based on a combination of revenue growth and market share position during. We further considered a vendor's performance, where applicable, in Gartner Magic Quadrant and Market Guide reports. Dynatrace Dynatrace's slightly above-market-average growth in allowed this vendor to extend its revenue leadership position in the APM tool market. It had nearly twice as much revenue as the next vendor, IBM. Due to high visibility in the marketplace, Dynatrace is most often competing against other top vendors in this space for large, complex, enterprise opportunities. These include not only traditional enterprise applications (such as ERP and CRM), but also solutions for monitoring modern cloud applications. The breadth and depth of Dynatrace's APM suite is a key differentiator compared with other APM suites in the market. This has helped the vendor regain and strengthen its focus two full years after the spinoff from Compuware. Dynatrace is transforming its core technology to a modern platform, which has been wellreceived in the market. With a large enterprise sales team, which is dedicated to APM, the vendor has an advantage over competitors that are coming upmarket more recently. Dynatrace believes that its cloud-native application monitoring, strategic alliances with cloud providers and local domain knowledge (such as providing services in local languages and its regional sales teams and marketing executives) further differentiate it from competitors.
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