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Report: Open Source a Judgment Standard

Open Source is changing the way that Gartner Group measures the application development market. The big loser as a result may well be proprietary Java application development tools.

Laurie F. Wurster, research director at Gartner Research, explained that Gartner has undergone a major change in methodology.

"Previous to this year we counted new license revenue," Wurster told internetnews.com. "This year we're doing total software revenue, which includes license revenue. It also includes updates/upgrades. It includes subscriptions and ASP models. We also include support revenue and maintenance contracts.

"We feel this is a better long-term predictor of the market especially as markets start to mature," Wurster added.

Wurster is the co-author, along with Fabrizio Biscotti, of the report "Market Share: Application Development and Project and Portfolio Management, Worldwide, 2005."

Open source is significantly impacting three areas of application development, according to Gartner, which includes testing tools, change configuration management and Java development.

"In our previous method using license revenue only, there was really no way to count what the impact of open source was except to say that the application development market is declining," Wurster explained.

"The reason why the application development market is declining is because people are starting to use open source. It is one of the most mature open source markets."

Wurster noted that without the open source numbers in the report, the application development market is actually in a state of decline on a year- over-year basis. Open source is taking the declining part of the application development market.

"Open source is funny because there isn't, in terms of the normal standards, revenue attached to it in many cases," Wurster said. "So we had to put together some assumptions on how it's actually impacting and put dollar numbers around those assumptions."

The impact of open source, though, is relatively clear with proprietary Java development, testing tools, and software change and configuration tools declining in growth due to strong open source development tool adoption in the same areas.

The report notes that the traditional Java development tools segment declined by 2 percent on a year-over-year basis. In contrast, open source software increased by 21 percent.

The Gartner report pegged the total worldwide growth of the application development and project and portfolio management software market at 6.7 percent with total 2005 revenues of more than $7.0 billion. Without including open source in the numbers, the growth rate would have only been 4.4 percent.

In terms of vendor share, IBM held the lead in total software revenue with a 25.4 percent market share. Microsoft came in second and CA came in third.

"Gartner's ranking of IBM as the No. 1 application development vendor for the fifth consecutive year is a testament to our Rational portfolio built on open standards," said Daniel Sabbah, general manager of Rational software at IBM.

"We have more than double the market share of our nearest competitor, Microsoft, and we are continuing to see strong momentum with developers, partners and customers around our portfolio."