Understanding shifting software marketscape essential to software producers’ global product marketing strategies
Schaumburg, IL - Jun 14, 2011 - Flexera Software, the leading provider of strategic Application Usage Management solutions for application producers and their customers, today announced the second installment of its Application Usage Management Benchmarking Report, which highlights trends in the software and high-tech device industry.
The new report examines the impact of the global recession on the software industry around the world by looking at aggregate levels of software downloads by customers via Flexera Software's FlexNet Delivery on-demand product, a cloud-based electronic software delivery service used by software vendors and device manufacturers to deliver applications, patches and upgrades to their customers. Aggregate software downloads statistics, tracked by FlexNet Delivery on-demand, can be correlated to vendor revenues from new and existing customers.
Marketshare Is Stable globally, but Volatility Varies By Region
The Benchmarking Report first examined the share of software downloads by region between 2007-2010, and found that North America, Europe and Australia/New Zealand have all maintained their relative share of the software market during this timeframe, at 63%, 34% and 2%, respectively. But closer examination reveals uneven impact of the recession by region. For instance, download activity in Australia and North America showed the greatest volatility with +20% in download growth in 2007 prior to the recession, and up to 19% declines during the recession. In contrast, Europe remained relatively stable, with only 6% download growth in 2007, pre-recession, but declines peaking at only 12% from 2009 to 2010.
"This data reveals that the global recession did not work to any single region's advantage or disadvantage - everyone shared in the pain," said Bashyam Anant, director of product management at Flexera Software. "However, the pain was greater for those regions that, in good times, saw stronger growth. Volatility - by definition, works both ways."
Within Europe, Global Recession is Creating New Winners & Losers
However, the picture of European stability changes upon closer examination of download activity by sub-region and country. According to the Benchmarking Report findings, between 2007 and 2010, Eastern and Southern Europe's share of overall European software downloads grew from 16% to 26%, while Northern Europe's declined from 36% to 23%. "This reminds us that the EU is a heterogeneous market with vast cultural and economic variances between its countries. Some countries will grow in market share and others will decline," said Anant.
For instance, the top three countries within each subregion dominate that subregion's software market. In Western Europe - Germany, France and the Netherlands represent 82% of all download activity. 89% of download activity in Southern Europe comes from Italy, Spain and Portugal. 80% of Northern Europe's activity is dominated by the UK, Sweden and Norway. And 71% of Eastern Europe's download activity is dominated by Russia, Poland and the Czech Republic.
Overall, however, Germany, the UK and France still dominate the European software industry, collectively representing 49% of all European software downloads - but this is down from more than 60% in 2007. The decline in market share of these three countries occurred while other European countries grew their market share.
The takeaway is clear for software vendors competing in the global marketplace -- regional differences are significant, and must be accounted for when developing, packaging and marketing software. "For example, from this Benchmarking Report a product manager considering expansion into Europe can know readily that Germany, France and the UK represent almost 50% of all European software activity, and therefore German, English and French should be the top three languages to consider for localizing their product", said Anant. "Software vendors that understand the nuances of regional markets and are able to respond rapidly with tailored products that address those needs will have the advantage."
"Information on software application usage can be very valuable for software executives and customers, but it is not typically easy to obtain. With SaaS applications such as Flexera Software's FlexNet Delivery, access to software is centrally provisioned and can be more easily tracked for benchmarking purposes," said Amy Konary, research vice president - software licensing & provisioning, at IDC. "As more of this kind of usage information becomes available, it will be very useful in helping software executives to make intelligent, informed decisions about customer adoption patterns and market opportunities."
About The Application Usage Management Benchmarking Report
Flexera Software's Application Usage Management Benchmarking Report provides insights on the global software industry and the evolving use of increasingly strategic applications. It analyzes anonymized data collected through FlexNet Delivery On-Demand, Flexera Software's on-demand electronic software delivery platform, to gain insights into global application usage trends. Flexera Software's licensing, compliance and entitlement management solutions are used by thousands of software producers and high-tech device manufacturers around the world to deliver software and software updates to millions of customers and to manage software subscriptions and entitlements. They support new revenue models easily and efficiently while streamlining and automating complex back-office processes.
The software producers and high-tech device manufacturers that deploy Flexera Software's licensing, compliance and entitlement management solutions are responsible for more than $50 billion in annual software sales, and deliver their products to more than 3.5 million customers around the world. Our solutions are embedded in more than 20,000 software and high-tech device applications. With such a broad base of activity and corresponding transactional data captured by our systems, Flexera Software is in a unique position to identify and report on larger compliance and entitlement management trends of importance to market players and market watchers.
Read the full Benchmarking Report on Flexera Software's Entitlement & Compliance Management Blog.
Flexera is reimagining the way software is bought, sold, managed and secured. We view the software industry as a supply chain, and make the business of buying and selling software and technology asset data more profitable, secure, and effective. Our Monetization and Security solutions help software sellers transform their business models, grow recurring revenues and minimize open source risk. Our Vulnerability and Software Asset Management (SAM) solutions strip waste and unpredictability out of procuring software, helping companies buy only the software and cloud services they need, manage what they have, and reduce compliance and security risk. Powering these solutions and the entire software supply chain, Flexera has built the world’s largest and most comprehensive repository of market intelligence on technology assets. In business for 30+ years, our 1200+ employees are passionate about helping our 80,000+ customers generate millions in ROI every year. Visit us at www.flexera.com.
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