Worldwide Software Market Forecast to Continue on Modest Growth Trajectory Through 2017

International Data Corporation (IDC) released the latest forecast from the Worldwide Semiannual Software Tracker. For 2012, the worldwide software market grew 3.6% year over year, less than half the growth rate experienced in 2010 and 2011. IDC believes these results mark the beginning of a more conservative period of growth. The forecast growth rate for 2013 is 5.7% while the compound annual growth rate (CAGR) for the 2012-2017 forecast period is 6.3%.

The collaborative applications software category is forecast to have the highest growth in the short term (2013). This category includes social software, which is growing from a lower revenue base. The collaborative applications category is also experiencing more cloud deployments than other categories and this represents new software investments. The structured data management software category is expected to show the strongest growth over the five-year forecast period with a 9.3% CAGR from 2012-2017, fueled by faster growth in the last 2-3 years of the forecast. Data management is at the core of the information-driven economy and will play a critical role in the implementation of Big Data and analytics.

On a regional basis, the emerging economies will experience stronger growth than in mature economies. The average 2012-2017 CAGR for Asia/Pacific (excluding Japan), Latin America, and Central Eastern, Middle East, and Africa (CEMA) is 8.8% while the average CAGR for the mature regions – North America, Western Europe, and Japan – is 5.0%. The emerging regions have been gaining almost 0.7% of market share every year since 2008 and they are expected to represent almost 19% of global software revenues in 2017.

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New Engagement Survey Metric Uncovers More Risk For Employers Who Want To Keep Their Top Performers

HR departments typically track dozens of metrics, many of which are ignored by CEOs. But Leadership IQ has developed a new HR metric that links employee engagement survey scores with performance appraisal ratings.  And it’s quickly capturing executives’ attention, with articles and commentary across every major business information medium.

Leadership IQ researchers linked employees’ scores on their annual engagement surveys with the scores they received on their annual performance appraisals at 207 companies.  And then, by identifying statistical relationships between engagement and appraisal scores, Leadership IQ is able to make predictions and recommendations about high performer turnover, low performer accountability, middle performer development, and much more.

In the latest example of this metric, Leadership IQ identified that in 42% of the companies, low performers are MORE engaged than high and middle performers.

Leadership IQ’s study, titled “JobPerformance Not a Predictor of Employee Engagement” also detailed a 1,000-person technology-services firm, where low performers were more engaged than high performers. The annual appraisals at this technology firm use a 4-point scale, ranging from Unacceptable to Superior. According to the company’s 2012 statistics, 18% of employees can be considered low performers, 20% are considered high performers, and 62% are considered middle performers.

After Leadership IQ administered an employee engagement survey, it found …

-- Low performers were significantly more motivated to give 100% effort at work than high performers

-- Low performers were significantly more likely to recommend the company as a great organization to work for than high performers

-- Low performers were significantly more likely than high performers to believe that leadership holds people accountable for their performance

-- Low performers were significantly more likely than high performers to feel that all employees live up to the same standards

Examining these findings, the firm then expanded the review across more than 200 companies and the results were amplified. There are ample reasons why these findings put organizations at risk. One of them is the fact that high performers, who thrive on being highly engaged, don’t tend to stick around very long if they aren’t engaged. It’s disturbing news for any company that believes their people are their most important asset.

The best leaders are responding by learning the facts and taking action. They discover and act on the factors pushing valuable employees out the door and build on the factors that tug at them to stay. They take action to make all employees more mentally and physically accountable.

Great organizations also identify the key attitudes that define their success and failure so their leaders can accurately identify, reward and correct behavior according to actual employee performance. They make sure employees, especially high performers, understand the company vision and they recognize that what defines most low performers is the wrong attitude (not a lack of skill).

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Gartner: Half of Employers will Require Employees to Supply Their Own Device for Work Purposes by 2017

As enterprise bring your own device (BYOD) programs continue to become more commonplace, 38 percent of companies expect to stop providing devices to workers by 2016, according to a global survey of CIOs by Gartner, Inc.'sExecutive Programs.

Gartner defines a BYOD strategy as an alternative strategy that allows employees, business partners and other users to use a personally selected and purchased client device to execute enterprise applications and access data. It typically spans smartphones and tablets, but the strategy may also be used for PCs. It may or may not include a subsidy.

BYOD drives innovation for CIOs and the business by increasing the number of mobile application users in the workforce. Rolling out applications throughout the workforce presents myriad new opportunities beyond traditional mobile email and communications. Applications such as time sheets, punch lists, site check-in/check-out, and employee self-service HR applications are just a few examples. Expanding access and driving innovation will ultimately be the legacy of the BYOD phenomenon.

While BYOD is occurring in companies and governments of all sizes, it is most prevalent in midsize and large organizations ($500 million to $5 billion in revenue, with 2,500 to 5,000 employees). BYOD also permits smaller companies to go mobile without a huge device and service investment. Adoption varies widely across the globe. Companies in the United States are twice as likely to allow BYOD as those in Europe, where BYOD has the lowest adoption of all the regions. In contrast, employees in India, China and Brazil are most likely to be using a personal device, typically a standard mobile phone, at work.

How a well-managed BYOD program subsidizes the use of a personal device is critical, and can dramatically change the economics. Today, roughly half of BYOD programs provide a partial reimbursement, and full reimbursement for all costs will become rare. Gartner believes that coupling the effect of mass market adoption with the steady declines in carrier fees, employers will gradually reduce their subsidies and as the number of workers using mobile devices expands, those who receive no subsidy whatsoever will grow.

BYOD does increase risks and changes expectations for CIOs. Unsurprisingly, security is the top concern for BYOD. The risk of data leakage on mobile platforms is particularly acute. Some mobile devices are designed to share data in the cloud and have no general purpose file system for applications to share, increasing the potential for data to be easily duplicated between applications and moved between applications and the cloud.

However, in general, IT is catching up to the phenomenon of BYOD. More than half of organizations rate themselves high in security of corporate data for enterprise-owned mobile devices. This new confidence in the security posture to support BYOD is a reflection of more-mature tools and processes that address myriad needs in the security area.

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U.S. Tech Market Will Grow by 6.2% in 2013 and 6.8% in 2014

No one would claim that the US tech market is booming.  With Europe still mired in recession and debt problems, US economic growth looking soft, and business and consumer worries about the US government raising tax rates and cutting Federal spending, it is not surprising that businesses and governments are being cautious in their purchases of technology goods and services.  But we think the fear is overblown.  Forrester's forecast for the US tech market in 2013 and 2014 -- published as "US Tech MarketOutlook For 2013 And 2014: Better Times Ahead" -- projects a 6.2% rise in 2013 and a 6.8% growth in 2014 in US business and government purchases of computer equipment, communications equipment, software, IT consulting and systems integration services, and IT outsourcing.  Adding in slow growing telecommunications services pulls growth down to 5.7% in 2013 and 6.1% in 2014. That may not be a boom, but it is certainly not a bust.

While CIOs are cautious in their tech buying -- and in the case of the Federal government, actually cutting back -- that caution has and will show up mostly in reduced spending on computer and communications equipment (with the exception of tablets).  CIOs will be most aggressive in software, especially for SaaS apps, analytics, and mobile apps. IT outsourcing will see good growth in 2013 as the result of 2012 selection decisions, while IT consulting and systems integration will come on strong in 2014.  Business and government purchases of telecommunications services will continue to grow at a slower rate than the overall tech market.  

Construction, transportation, education, and healthcare will grow their IT budgets the fastest in 2013. CIOs in these industries will increase their IT spending due to better business conditions (construction, transportation) or market pressures (education and healthcare). CIOs in manufacturing will turn more cautious, and those in the federal government will have to reduce their tech buying in the face of mandated budget cutbacks. 

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Big Data, Analytics, and Cloud Drove Enterprise Software Growth in 2012

International Data Corporation (IDC) released the latest results from the WorldwideSemiannual Software Tracker. For 2012, the worldwide software market grew 3.6% year over year reaching a total market size of $342 billion, which was in line with IDC's previous forecast of 3.4% and less than half the growth rate experienced in 2010 and 2011. In that sense, 2012 confirms the beginning of a more conservative growth period. In the middle of this scenario, there are faster growing market segments, such as Data Access, Analysis and Delivery, Collaborative Applications, CRM Applications, Security Software, and System and Network Management Software. Every one of these markets grew in the 6-7% range, about double the rate for enterprise software as a whole.

Three primary segments comprise the total software market in IDC's software taxonomy: Applications; Application Development & Deployment (AD&D); and Systems Infrastructure Software. Among the three primary segments, the AD&D segment, which comprised nearly 24% of total software revenues in 2012, was the fastest growing market with a 4.6% year-over-year growth rate. Growth in the AD&D segment was largely driven by the performance of the Data Access, Analysis, and Delivery and the Structured Data Management secondary markets with 6.0% and 5.9% growth rates, respectively. Business Intelligence and Relational Database Management Systems (RDBMS) solutions are pushing the growing trend for these markets because of widening Big Data and Analytics adoption. Big data and analytics are also closely tied to the fast growth social business software markets, where the combination of contextual data and the "right" expertise is becoming critical for supporting enterprise decision making and data driven customer experience solutions.

In the Applications primary market segment, which comprised 49% of total software revenue, year-over-year growth for 2012 was 3.3%, which is slightly lower than for software overall. Within this market segment, CRM and Collaborative Applications stood out with year-over-year growth rates near 7%. While the former is driven by the cloud migration trend and the large investments by businesses to deliver a better customer experience to the "social customer", the latter is largely driven by the Enterprise Social Software market, which grew at 24.8% year over year and gained more than 5 points of market share over three years. Mobile, while not a direct enterprise applications driver, is however a contributing factor and driver for businesses moving to newer and more mobile device agnostic enterprise software..

The third primary segment of the software market is System Infrastructure Software, which comprised 27% of total software revenue and grew 3.3% year over year in 2012. The Security Software and System/Network Management Software secondary segments both grew more than 6% year over year as these solutions provide the infrastructure - whether in the cloud or on-premise - to support the 3rd Platform. Although the other two System Infrastructure Software secondary segment (Storage Software and System Software) had flat growth in 2012, the Virtualization sub-segments had double-digit growth rates.

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Email and Co-Workers Among the Biggest Distractions at Work

Just how distracting are unnecessary emails and chatty coworkers in the workplace? A new survey from JiveSoftware, Inc. found nearly four out of every five workers (79 percent) in the U.S. spend time during their workday checking emails when that time could be used towards something more productive. And, more than one-third of workers (36 percent) say the people they work with are their biggest distraction on the job.

Key findings from the survey include:

Time Wasted by American Workers on Email When They Could Be Doing Something More Productive:

-- 79 percent say they waste time checking emails

-- 18 percent spend more than a quarter of their workday checking irrelevant emails.

-- On average, American workers employed full time, part-time or self-employed spend 16 percent of a workday checking irrelevant email.

The Biggest Distractions at Work:

-- 36 percent of employed Americans said coworkers are their biggest distraction at work.

-- 20 percent said email was their biggest distraction during the workday.

-- 19 percent said that meetings are the most distracting during the workday.

Finding Work/Life Balance:

-- Close to half (48 percent) of employed Americans report working when on vacation.

-- Almost one fifth (19 percent) of employed Americans are more overwhelmed by technology at work now compared to five years ago.

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PC Shipments Post the Steepest Decline Ever in a Single Quarter, According to IDC

Worldwide PC shipments totaled 76.3 million units in the first quarter of 2013 (1Q13), down -13.9% compared to the same quarter in 2012 and worse than the forecast decline of -7.7%, according to the International Data Corporation (IDC) WorldwideQuarterly PC Tracker. The extent of the year-on-year contraction marked the worst quarter since IDC began tracking the PC market quarterly in 1994. The results also marked the fourth consecutive quarter of year-on-year shipment declines.

Despite some mild improvement in the economic environment and some new PC models offering Windows 8, PC shipments were down significantly across all regions compared to a year ago. Fading Mini Notebook shipments have taken a big chunk out of the low-end market while tablets and smartphones continue to divert consumer spending. PC industry efforts to offer touch capabilities and ultraslim systems have been hampered by traditional barriers of price and component supply, as well as a weak reception for Windows 8. The PC industry is struggling to identify innovations that differentiate PCs from other products and inspire consumers to buy, and instead is meeting significant resistance to changes perceived as cumbersome or costly.

Regional Highlights

United States – The U.S. market had another dismal quarter in 1Q13, contracting -12.7% year on year, with a drop of -18.3% compared to the fourth quarter of 2012. With total volume falling to 14.2 million, quarterly shipments reached their lowest level since the first quarter of 2006. With this latest figure, the U.S. is now in its tenth consecutive quarter of year-on-year contraction (excluding a brief moment of growth – less than 2% year on year – in 3Q11).

EMEA – As expected, Europe, Middle East and Africa (EMEA) remained constrained, posting a stronger double-digit decline than anticipated in the first quarter of 2013. Results fell short of expectations in the consumer segment as softness in demand persisted amid a continued shift to tablets and ongoing budget pressures. Meanwhile, the market response to Windows 8 and touch-enabled devices remained slow, leading to cautious sell-in from most vendors. Shipments in the commercial market remained constrained as predicted, following continued economic pressure and lack of major IT renewals.

Japan – PC shipments were in line with expectations in the first quarter. Some economic improvement is helping to support commercial replacement demand ahead of the scheduled end of support for Windows XP next year. However, consumer shipments remained very weak.

Asia/Pacific (excluding Japan) (APeJ) – PC shipments in APeJ declined sharply, dropping a record -12.7% year on year, the first time the region has experienced a double-digit decline. Although much of the earlier Windows 7 stock had cleared, a lukewarm reception toward Windows 8 hampered new shipments. China's inactivity contributed heavily to the decline, as public sector spending continued to be constrained.

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