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System Management Software Ready for Growth

The Asia-Pacific market (excluding Japan) for system management software is anticipated to be almost three times larger in 2006 than what it was in 2001, reaching almost US$659 million in the next five years, said IDC in its report, 'Asia-Pacific (excluding Japan) System Management Software Market Analysis and Forecast, 2001 - 2006'.

According to the research firm, drivers in this market include heavy system solution spending, particularly in the Greater China region; the return on current education investments; as well as the challenge of managing increasingly mature, heterogeneous IT environments. It further stated that there would be a stronger demand for tools that will assist IT departments to prioritize work tasks and, most importantly, assist the distribution of labor by identifying and resolving the low-level IT tasks, which can be determined by the administrator.

In addition, IDC anticipates that an increased penetration of Windows 2000 as an enterprise platform will occur and this will have a noticeable impact on the system management software market in Asia-Pacific.

Market analyst, Software, IDC Asia-Pacific, Grace Lai commented: "Companies with existing infrastructure investments will sustain the breadth of the system management software market during the next five years. On the other hand, the newer software markets such as Malaysia and Taiwan, will slowly but surely build on the depth of management capability required for their infrastructures or already present in the mature environments."

Greater China Catches Up
Australia and New Zealand are currently responsible for the largest portion of system management spending, contributing almost 31 percent (US$75.5 million) to the Asia-Pacific region. However, Greater China will claim the lion's share of the market in as short as two years. Currently, the Greater China sub-region represents 28 percent of the region's spending, but by 2006, IDC projects this figure to rise to 43 percent (US$298.4 million).

The Singapore system management software market is also not doing too badly. It grew a healthy 12 percent despite difficult economic conditions and historical periods of good investment. IBM topped the vendor list in 2001, with a market share of 22 percent, closely followed by HP. However, both vendors lost market share in 2000 to rival BMC, which has seen significant interest in its Performance Management offerings as it has emerged as the quiet goal of the System Management software market, with Singaporean firms increasing its investment by 72 percent year-on-year.

"It's all part of the maturing demands of the IT environment on staff", said Lai. "Performance management software is used for capacity planning, performance data collection, performance tracking, and even simulation. We're going to see more interest in its application to monitoring of service level agreements - whether companies are receiving the service they pay for, whether providers are achieving the levels agreed upon - particularly in these times of careful economic management."

Top Three Vendors In Asia
Despite the good news, the system management market suffered in the light of the philosophy of 'necessary spending' prompted by the current market conditions that saw tightened IT budgets directed to the 'hot topics' of storage and security.

Lai said: "The drivers for growth in this market are more stable, constant features, oriented to business-critical systems and applications. These are areas that have already received much attention, particularly from the prior Y2K and Internet-led investment boom."

As a result, there was a five percent decrease in the overall system management software market but the top three vendors who dominate this market in Asia remained the same as in 2000 and 2001.

Computer Associates again topped the system management software market, despite a 20 percent decrease in its revenue base between 2000 and 2001. IBM held on to the second position with a revenue base of US$37.7 million - a decrease of 25 percent year-on-year - while BMC's market share grew to 14 percent in 2001 (US$33.8 million). The contribution of the collective others vendors grew by 13 percent year-on-year to form US$71.8 million or 29 percent of the 2001 market.