Oracle Overhauls IBM To Take Second Place Behind Microsoft In Software Vendor Market

Oracle overtook IBM to become the world’s second largest software vendor in 2013 as the worldwide market continued to show a shift towards the cloud and new technologies.

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Gartner reports that Oracle saw its revenue grow by 3.4 per cent to hit $29.6 billion [£17.8 billion] in 2013, enough to overtake IBM’s figure of $29.1 billion [£17.5 billion] where growth was a mere 1.4 per cent compared.

"This is the first time in Gartner's global software market share research that Oracle has ranked second in terms of total software revenue with $29.6 billion [£17.8 billion and capturing 7.3 per cent of the global market. Global trends around big data and analytics with business investment in database and cloud-based applications helped to drive Oracle's top-line growth,” said Chad Eschinger, research vice president at Gartner.

Revenue for the entire global software market reached $407.3 billion [£244.8 billion] in 2013, which was a 4.8 per cent increase compared to the year before with developed markets the primary drivers of this growth and making up for the slow movement in emerging markets.

"The software market has been changing shape over the past five years, and cloud is driving the bulk of this change as software vendors acquire and provide applications and infrastructure technology to support the cloud and the Internet of Things [IoT] movement," said Joanne Correia, research vice president at Gartner. "A clear indicator of this is that for the first time we have a pure cloud vendor in the top 10."

That cloud vendor is Salesforce.com, which was catapulted to 10th place with its revenue growing by 33.3 per cent to $3.8 billion [£2.3 billion]. Microsoft continues to lead the way overall with $65.7 billion [£39.5 billion] in software revenue and it recorded above-average growth of six per cent in 2013.

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"At this point, the new and emerging technology markets in software, such as digital marketing and public cloud computing, are so nascent that investors are favouring those companies that are early and aggressive in grabbing both market and mind share — in many cases dismissing progress on earnings and cash flow in hopes that they will one day follow,” added John Rizzuto, research VP and Invest analyst ay Gartner.