GARTNER DATAQUEST SAYS WORLDWIDE APPLICATION SERVER MARKET TOTALED $1.18B IN 2001.

The worldwide application server market suffered a severe growth slowdown in 2001, as revenue grew only 20 percent, down from 92 percent growth in 2000, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE:IT and ITB).

Worldwide application server new license revenue totaled $1.18 billion in 2001, up from $990 million in 2000. BEA narrowly beat IBM to continue to lead the market with 34 percent of new license revenue. IBM, which showed the strongest growth rate among the top 5 vendors, gained market share of new license revenue at the expense of Sun and other vendors

"The application server segment is splitting into low-end and high-end server solutions. On the high-end, IBM and BEA are pushing the millions of transactions per minute threshold. On the low-end, HP and Microsoft are basically offering the good enough 'free' technology to go after the small-to-medium size business and the low-end transaction processing markets," said Joanne Correia, vice president for Gartner Dataquest's Software Industry Research group.

All of the major software and server hardware vendors are pushing their application server strategy as the e-business platform for building enterprise applications. The trend of packaging application servers with integration broker suites, packaged applications, portals, development tools, commerce platforms and new software solutions, will increase dramatically in 2002 and will continue for the foreseeable future.

"This will result in the next evolution of application server technology in areas such as B2B, enterprise information portals (EIP), business process monitoring (BPM) and business activity monitoring (BAM). This will cause software vendors to continue to change the nature and packaging of their products," Correia said. "Application servers, portal software and integration brokers are merging into a new class of e-business platforms we call application platform suites," said Correia. "This merging trend will continue through 2003, which means even more application integration market segments and vendor consolidation during the next 12 to 18 months."

Additional information is available in the Gartner Dataquest Research Brief, "IBM Closes Gap in 2001 Application Server Market." This report examines the industry trends for 2001 and how the top-tier vendors performed. This information is produced by Gartner Dataquest's Worldwide Software Industry group. This research group provides analysis on infrastructure and application product market trends, player positioning and channels of the packaged business application software market.