Gartner Says Worldwide PPM Software Market On Pace for 18 Percent Growth in 2003.

Business Editors

STAMFORD, Conn.--(BUSINESS WIRE)--July 9, 2003

Despite the adverse economic conditions that have severely affected other applications software segments, project portfolio management (PPM) software licenses continue to grow, according to Gartner, Inc. (NYSE: IT and ITB).

Worldwide PPM new license revenue grew 36 percent in 2002, totaling $357.7 million, and is expected to increase 18 percent in 2003, to $420.6 million.

"During periods of economic weakness, organizations have a heightened need to lower costs as their ability to increase revenue is limited," said Hams El-Gabri, industry analyst in Gartner's software research group. "By monitoring project and service delivery, PPM software applications enable organizations to scrutinize their internal processes, provide direct visibility into operations and develop intelligence behind decision making."

Unlike other enterprise application software (EAS) segments, the PPM software market is relatively young. Competition is fierce and no one vendor has established a clear leadership position. However, because most of the functionality within PPM isn't new, several EAS suite vendors have successfully developed or acquired functionality and penetrated the market.

"By doing this quickly enough, these vendors not only established themselves as leaders in a growing market, but they also tap into their existing customer base before others could. Being first to market often makes a stronger impact than being best in the market," said El-Gabri.

EAS suite vendors are expected to sell PPM software to the IS departments of their established customer base. Gartner analysts recommend that vendors increase marketing efforts around PPM and continue educating the market on its benefits.

With portfolio management as the leading driver behind PPM application purchases, other drivers include in-house procurement of IT services, a geographically widespread workforce, and the IT/IS spending slowdown that is forcing organizations to become more efficient. "However, the unrealistic expectation that the software will cure all ills in IS departments is an inhibitor to growth in this market. The software is only a gateway for diagnosis; the cure will come from the execution," said El-Gabri.

More information on the PPM market is provided in the Gartner Dataquest Market Trends report "Project Portfolio Management: Trends and Forecast." The report provides a revenue forecast for the PPM market and looks at future trends in the industry. The document is available on Gartner's Web site at http://www.gartner.com/DisplayDocument?id=398949&ref=g_search.

To subscribe to Gartner programs, please call 408-468-8000. Reports can be purchased on the Web at www.gartner.com.

About Gartner

Gartner, Inc. is a research and advisory firm that helps more than 10,000 clients leverage technology to achieve business success. Gartner's businesses are Research, Consulting, Measurement, Events and Executive Programs. Founded in 1979, Gartner is headquartered in Stamford, Conn., and has more than 3,800 associates, including approximately 1,000 research analysts and consultants, in more than 75 locations worldwide. Revenue for calendar year 2002 totaled $888 million. For more information, visit www.gartner.com.