IDC's software taxonomy, 2007

INDUSTRY DEVELOPMENTS AND MODELS

IDC's Software Taxonomy, 2007
Richard V. Heiman

IDC OPINION
IDC's software taxonomy represents a collectively exhaustive and mutually exclusive
view of the worldwide software marketplace. This taxonomy is the basis for the
relational multidimensional schema of the IDC Software Market Forecaster research
www.idc.com

database. The information from this continually updated database is used to generate
consistent packaged software market sizing and forecasts. Highlights are as follows:

! For 2007, the taxonomy includes 79 individual functional markets grouped within
three primary segments of "packaged" software: applications, application
F.508.935.4015

development and deployment (AD&D) software, and system infrastructure
software.

! Revenue is further segmented across three geographic regions and nine
operating environments.
P.508.872.8200

! Additionally, the taxonomy defines a wide range of "competitive" markets that are
combinations of whole or fractions of functional markets and that reflect such
market dynamics as the problem being solved or the technology on which the
software is based.
Global Headquarters: 5 Speen Street Framingham, MA 01701 USA

Filing Information: February 2007, IDC #205437, Volume: 1, Tab: Markets
Software Overview: Industry Developments and Models

T ABLE OF CONT ENT S

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In This Study 1
Executive Summary.................................................................................................................................. 1

S i t u a t i o n O ve r v i e w 2
Introduction............................................................................................................................................... 2
What Is Packaged Software? ................................................................................................................... 3
General Functional Market Definitions...................................................................................................... 5
Software Taxonomy Functional Market Changes for 2007 ....................................................................... 8
Applications Market Definitions................................................................................................................. 10
Consumer Applications...................................................................................................................... 11
Consumer Software.................................................................................................................... 11
Collaborative Applications ................................................................................................................. 11
Integrated Collaborative Environments ...................................................................................... 11
Messaging Applications.............................................................................................................. 12
Team Collaborative Applications ................................................................................................ 13
Conferencing Applications.......................................................................................................... 13
Other Collaborative Applications ................................................................................................ 13
Content Applications.......................................................................................................................... 13
Content Management................................................................................................................. 14
Authoring and Publishing Software ............................................................................................ 15
Search and Discovery ................................................................................................................ 15
Enterprise Portals....................................................................................................................... 16
Enterprise Resource Management Applications................................................................................ 16
Financial Accounting Applications .............................................................................................. 17
Human Capital Management...................................................................................................... 18
Payroll ........................................................................................................................................ 21
Procurement............................................................................................................................... 21
Order Management .................................................................................................................... 23
Financial Performance and Strategy Management Applications ................................................ 24
Project and Portfolio Management ............................................................................................. 24
Enterprise Asset Management ................................................................................................... 25
Supply Chain Management Applications ........................................................................................... 25
Logistics ..................................................................................................................................... 26
Production Planning ................................................................................................................... 26
Inventory Management............................................................................................................... 26
Operations and Manufacturing Applications ...................................................................................... 27
Services Operations Management ............................................................................................. 27
Manufacturing............................................................................................................................. 27
Other Back Office ....................................................................................................................... 27
Engineering Applications ................................................................................................................... 28
Mechanical Computer-Aided Design .......................................................................................... 28
Mechanical Computer-Aided Engineering .................................................................................. 28
Mechanical Computer-Aided Manufacturing............................................................................... 29
Product Information Management .............................................................................................. 29
Other Engineering ...................................................................................................................... 29
Customer Relationship Management Applications ............................................................................ 30

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T ABLE OF CONT ENT S — Continued

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Sales .......................................................................................................................................... 30
Marketing.................................................................................................................................... 31
Customer Service....................................................................................................................... 32
Contact Center ........................................................................................................................... 32
Application Development and Deployment Market Definitions ................................................................. 33
Information and Data Management Software .................................................................................... 33
Relational Database Management Systems............................................................................... 33
Nonrelational Database Management Systems ......................................................................... 34
Database Development and Management Tools ....................................................................... 35
Data Integration and Access Software ....................................................................................... 36
Application Development Software.................................................................................................... 39
Unified Development Environments ........................................................................................... 39
Third-Generation Language Tools.............................................................................................. 40
Software Construction Components........................................................................................... 41
Analysis, Modeling, and Design Tools........................................................................................ 41
Web Site Design/Development Tools......................................................................................... 42
Quality and Life-Cycle Tools.............................................................................................................. 42
Automated Software Quality Tools ............................................................................................. 42
Software Configuration Management Tools ............................................................................... 42
Application Deployment Software...................................................................................................... 43
Application Server Software Platforms ....................................................................................... 43
Integration Server Software Platforms........................................................................................ 45
Message-Oriented Middleware................................................................................................... 46
Transaction Server Middleware.................................................................................................. 47
Industry-Specific Application Deployment Software ................................................................... 47
Application Deployment Adapters/Connectors ........................................................................... 47
Other Development Tools.................................................................................................................. 48
Other Programmer Development Tools and Utilities .................................................................. 48
Data Access, Analysis, and Delivery Software .................................................................................. 48
End-User Query, Reporting, and Analysis.................................................................................. 48
Advanced Analytics Software ..................................................................................................... 49
Spatial Information Management Software................................................................................. 49
System Infrastructure Software Market Definitions................................................................................... 50
System and Network Management Software .................................................................................... 50
Event Automation Tools ............................................................................................................. 50
Job Scheduling Tools ................................................................................................................. 50
Output Management Tools ......................................................................................................... 51
Performance Management Software .......................................................................................... 51
Change and Configuration Management Software..................................................................... 51
Problem Management Software ................................................................................................. 52
Network Management Software ................................................................................................. 52
Security ............................................................................................................................................. 53
Identity and Access Management .............................................................................................. 53
Secure Content and Threat Management .................................................................................. 54
Security and Vulnerability Management Software ...................................................................... 55
Other Security Software ............................................................................................................. 56
Storage Software............................................................................................................................... 56
Data Protection and Recovery Software..................................................................................... 56

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Storage Replication Software ..................................................................................................... 58
Archive and HSM Software ........................................................................................................ 59
File System Software ................................................................................................................. 60
Storage Management Software.................................................................................................. 60
Storage Infrastructure Software.................................................................................................. 61
Storage Device Management Software ...................................................................................... 61
Other Storage Software.............................................................................................................. 62
System Software ............................................................................................................................... 62
Operating Systems and Subsystems ......................................................................................... 62
Clustering and Availability Software ........................................................................................... 62
Virtual User Interface Software................................................................................................... 63
Virtual Machine Software............................................................................................................ 63
Remote Control Software ........................................................................................................... 64
Other System Software .............................................................................................................. 64
Geographic Area Definitions..................................................................................................................... 65
Operating Environment Definitions ........................................................................................................... 65
Other Market Views .................................................................................................................................. 67
Formal Competitive Markets Tracked................................................................................................ 67
Not Necessarily Mutually Exclusive ................................................................................................... 69
Applications-Based Competitive Markets .......................................................................................... 71
Data Warehousing Tools and Analytic Applications ................................................................... 71
Enterprise Resource Planning Applications................................................................................ 72
Enterprise Workplace ................................................................................................................. 73
Mobile Enterprise Applications ................................................................................................... 73
Supplier Relationship Management Applications ....................................................................... 74
Product Life-Cycle Management Applications ............................................................................ 75
Application Development and Deployment Software Competitive Markets ....................................... 76
Business Process Automation Software..................................................................................... 76
Embedded Database Management Systems ............................................................................. 77
Enterprise Metadata Technologies............................................................................................. 78
IT Governance............................................................................................................................ 78
Master Data Management .......................................................................................................... 79
Service Oriented Architecture and Web Services....................................................................... 81
Legacy Integration and Analysis Software.................................................................................. 83
System Infrastructure Software Competitive Markets........................................................................ 84
IT Asset Management Software ................................................................................................. 84
Mobile Device Management Software........................................................................................ 85
Mobile Middleware and Infrastructure Software ......................................................................... 85
Mobile Security Software............................................................................................................ 86
Software Distribution .................................................................................................................. 86

Future Outlook 87

Essential Guidance 87

Learn More 87
Related Research ..................................................................................................................................... 87
Appendix A: Lexicon ................................................................................................................................. 87
Appendix B: IDC's Software Market Forecast and Analysis Methodology ................................................ 99

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Company Revenue Modeling ............................................................................................................ 100
Revenue Recognition ........................................................................................................................ 100
Immediate Recognition............................................................................................................... 100
Deferred Recognition ................................................................................................................. 101
Subscription Revenue ................................................................................................................ 101
Mergers and Acquisitions: "Backstreaming" ...................................................................................... 101
Calendar Versus Fiscal Years ........................................................................................................... 101
Treatment of Exchange Rates ........................................................................................................... 102
Allocating Revenue to Geographic Regions ...................................................................................... 102
Allocating Revenue to Operating Environments ................................................................................ 102
Historical Data Reporting................................................................................................................... 102
Determination of "Other".................................................................................................................... 103
"When a Product Becomes a Feature" .............................................................................................. 104
Forecast Methodology ....................................................................................................................... 104
Competitive Market Maps .................................................................................................................. 105

©2007 IDC #205437

LIST OF T ABLES

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1 Packaged Software Functional Taxonomy, 2007: Applications by Secondary Market ................. 6
2 Packaged Software Functional Taxonomy, 2007: Application Development and Deployment
Software by Secondary Market .................................................................................................... 7
3 Packaged Software Functional Taxonomy, 2007: System Infrastructure Software by
Secondary Market ........................................................................................................................ 8
4 Summary of Software Functional Market Changes for 2007........................................................ 9
5 IDC's Software Competitive Markets, 2007.................................................................................. 68

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LIST OF FIGURES

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1 Packaged Software Revenue Data Model ................................................................................... 2
2 Model of Overlapping Competitive Markets.................................................................................. 70
3 Model of Mutually Exclusive Competitive Markets ....................................................................... 71
4 "Other" Company Estimation Model............................................................................................. 104
5 Sample Competitive Market Map ................................................................................................. 107

©2007 IDC #205437

IN THIS STUDY
This IDC study provides a detailed description of IDC's software market taxonomy.
For 2007, the taxonomy includes 79 individual functional markets grouped within
three primary segments of "packaged" software: applications, application
development and deployment (AD&D) software, and system infrastructure software.
Revenue is also segmented across three geographic regions and nine operating
environments. More granular geographic detail is available in many cases from
various IDC regional and country offices.

Additionally, the taxonomy defines a wide range of "competitive" markets.
Competitive markets are combinations of whole or fractions of functional markets that
reflect such market dynamics as the problem being solved or the technology on which
the software is based.

Executive Summary

IDC's software research programs maintain a centralized database that includes
worldwide total packaged software revenue for more than 1,000 software vendors.
We do not contend that this is an exhaustive list of software providers; in fact, we
believe there are more than 10,000 such suppliers. However, our database is
designed to support very precise forecasting, and the suppliers in the database
represent a majority of the software market's revenue overall and a majority of the
revenue in each of the various segmentations it supports. The revenue is allocated to
functional market segments, geographic areas, revenue types, industries, channels,
and operating environments. The functional software markets defined by the
taxonomy represent a collectively exhaustive and mutually exclusive view of the
worldwide software marketplace.

IDC's software market taxonomy is the basis for the relational multidimensional
schema of the IDC Software Market Forecaster research database. The information
from this continually updated database is used by IDC's software Continuous
Intelligence Services (CISs) (i.e., our subscription research services) to generate
consistent packaged software market sizing and forecasts.

Total packaged software revenue is defined as license revenue plus maintenance
revenue plus subscription and other software revenue. It is primarily the total
packaged software revenue that is further allocated to markets, geographic areas,
and operating environments. In addition to total packaged software revenue, IDC
collects software license revenue, software maintenance revenue, subscription and
other software–related revenue, and total company revenue (see Figure 1):

! License revenue includes revenue collected for software licenses, either limited
term (lease) or perpetual, that include licenses for new installations of a software
product, licenses for additional software options, changes to existing licenses
permitting more users or more computer system resources to be used by the
licensed software (based, of course, on the original license agreement); such
changes are often necessitated by server upgrades or staff increases or
conversions of licenses that result in incremental additional revenue such as

©2007 IDC #205437 1

conversions from a fixed number of users or processors to a site or enterprise
license.

License revenue does not include license maintenance revenue, which typically
includes fees covering version upgrades, the automatic delivery of bug fixes and
patches, and basic telephone support, all of which are normally delivered during
a fixed, renewable term of service.

! Maintenance revenue consists of fees charged for continuous improvement of
the software by repairing known faults and errors and/or enhancing and updating
the product, as well as for technical support.

! Subscription/other software revenue consists of fees to use software products
and to receive maintenance and support for those software products for a limited
period of time. Subscriptions consist of bundled software and services where the
fair value of the license fee is not separately determinable from
maintenance/support. This category also includes software lease or rental
revenue (often, but not exclusively, applied to mainframe software).

FIGURE 1

Packaged Software Revenue Data Model

License revenue
+ Maintenance revenue
+ Subscription/other software revenue
= Total packaged software revenue

+ Other revenue (e.g., nonrecurring IT service fees,
hardware, business process services)
= Company revenue
Source: IDC, 2007

SITUATION OVERVIEW

Introduction

The first section of this study describes the IDC software functional market taxonomy
as updated for 2007. It includes general definitions of terms, functional market
definitions and descriptions, and definitions of geographic areas and operating
environments. The functional markets are defined in terms of the features, functions,
and attributes of the software package, not the problem being solved or the
technology on which it is based.

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Additionally, this study defines a wide range of competitive markets. Competitive
markets are combinations of whole or fractions of functional markets that reflect such
market dynamics as the problem being solved or the technology on which the
software is based.

Competitive markets are typically more ad hoc because they are meant to reflect
current market approaches, coalitions, standards, and software architectures. Some
competitive markets have been modeled to address a broad solution market
category. Others, for example, define a market view particular to an architecture or
represent revenue in subsets of geographic regions.

What Is Packaged Software?

How does IDC identify the companies it measures and the resulting value of the
markets? Our objective is to define companies and markets that are relevant for
market research purposes — not for legal or accounting purposes nor simply for
publishing historic lists. Clearly, many companies have software and other types of
business units; this taxonomy is not about deciding on the relative strengths of these
business units and applying a single label to the entire company.

The question therefore is, When does a company market and deploy software that
should be counted as such for market research purposes?

IDC uses the term packaged software to distinguish commercially available software
from "custom" software, not to imply that the software must be shrink-wrapped or
otherwise provided via physical media. Packaged software is programs or codesets of
any type commercially available through sale, lease, or rental, or as a service.
Packaged software revenue typically includes fees for initial and continued right-to-
use packaged software licenses. These fees may include, as part of the license
contract, access to product support and/or other services that are inseparable from
the right-to-use license fee structure, or this support may be priced separately.
Upgrades may be included in the continuing right of use or may be priced separately.
All of the above are counted by IDC as packaged software revenue.

Packaged software revenue excludes service revenue derived from training,
consulting, and systems integration that is separate (or unbundled) from the right-to-
use license but does include the implicit value of software included in a service that
offers software functionality by a different pricing scheme (as described directly below
in more detail).

Increasingly, packaged software is also being marketed and deployed on a
subscription and transaction basis, as well as via other arrangements (e.g., for "free"
with the packaged software's "owner" taking a percentage of the revenue enabled by
the software as implicit "product" revenue), some of which do not involve a license.
Software has also long been available for lease or rent, typically on mainframes.
Furthermore, we must not be limited by accounting directives (such as those released
by AICPA and FASB) because this would neglect to count large segments of software
markets in a way that accurately reflects market dynamics and future opportunity.

©2007 IDC #205437 3

IDC's Software Market Forecaster research database includes revenue from a
company if the company competes in a packaged software market defined in the
taxonomy. From the market research standpoint, this is the most important question.
Software revenue is defined in terms of two types of offerings from the viewpoint of
the customer:

! The market for software code of a given functionality sold as such, typically via a
perpetual license

! The market for software code bundled and marketed in another way (e.g., an
application service) that competes with perpetually licensed software products

To be classified as packaged software revenue attributed to a company in the
Software Market Forecaster research database, all of the following have to be true:

! Ownership of intellectual property. Application service providers (ASPs) that
do not own the software code are not software vendors but channels for software
vendors. However, some vendors own the code and also provide an ASP
offering. In this case, IDC estimates a value for the software provided in that
manner. However, in the case of packaged open source software (where there is
no "owner" of the intellectual property), revenue is attributed to the distributor.

! Product is replicated. Software companies assemble a package of code from
components and "sell" multiple copies in a one-to-many business model. The
software product is replicated to support that model. Even though it may be
customized as it is being installed, when the customization capability is an
attribute built into the code, it is still considered replicated. Value-added resellers
(VARs) do customization to packaged software, often on a one-to-one basis. In
this case, VARs are a channel for the software. When a company takes code and
adds its own changes and sells the resulting package substantially as changed to
many customers, it is — in turn — an ISV that resells or OEMs components and
adds value. (In these cases, IDC estimates the pass-through revenue and
deducts it from the reseller and attributes it to the original owner of the intellectual
property so as not to double count revenue and artificially inflate the size of the
software market.)

! Competitive domain includes packaged software companies that license
intellectual property rights to functionally similar software code. There are
companies that offer to their customers packaged software functionality not via a
right-to-use license but as a "service" that is wholly or partially based on software
functionality. In this case, the question becomes, Does the company compete
with packaged software companies that provide the same functionality? If so, a
significant part of the basis of competition is the functionality of the software.
Thus, there is a software component of the service company's revenue stream,
and the value of the software must be "implicitly derived" or "attributed" and
subtracted from the commingled revenue stream. Counting becomes difficult if
the commingled product never has had a history of standalone software sales,
and thus there is no requirement (from accounting rules) for calling out the
revenue on the income statement. This accounting rule does not change the
market dynamics — as far as the customer is concerned, services with the same

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functionality are available as substitutes for licensed software products, and IDC
must account for this in our estimate of the size of the software market. This
procedure has been used by IDC in the operating system market for many years
when operating system revenue is bundled with hardware platforms. The
operating system is an important part of the value of the competitive hardware
offering. Software vendors sometimes do not offer the same functionality in
standalone form.

See Appendix A: Lexicon for a definition of terms used frequently throughout the IDC
software taxonomy but that are not defined within the body of this study because they
are not markets or submarkets. Also, see Appendix B: IDC's Software Market
Forecast and Analysis Methodology for an overview of the methodology employed by
IDC's software analysts for collecting, analyzing, and reporting revenue data for the
categories defined by the software taxonomy.

General Functional Market Definitions

! The worldwide software market includes all packaged software revenue across
all functional markets or market aggregations.

! Primary software markets are the aggregation of the functional markets for
applications, AD&D, and system infrastructure. The three primary markets
together make up the worldwide software market.

! Secondary software markets are 18 important aggregations that make up IDC's
packaged software market taxonomy. These secondary markets are consumer
applications, collaborative applications, content applications, enterprise resource
management (ERM) applications, supply chain management (SCM) applications,
operations and manufacturing applications, engineering applications, customer
relationship management (CRM) applications, information and data management
software, application development software, quality and life-cycle tools,
application deployment software, other development tools, data access, analysis
and delivery software, system and network management software, security,
storage software, and system software. These markets map into the three
primary markets and collectively equate to the worldwide software market.

! Functional markets are the focal point of IDC's analysis. IDC defines 79
individual functional markets for which it analyzes revenue by vendor, geography,
and operating environment. Functional markets also provide the foundation and
revenue base for the generation of competitive markets.

! Submarkets describe one or more discrete functional areas within a specific
market. Although submarket-level data may be reported in selected IDC studies,
this level of detail is not recorded in the Software Market Forecaster database.

Tables 1–3 provide an overview of the functional markets and secondary markets that
constitute the applications, AD&D, and system infrastructure software markets.

©2007 IDC #205437 5

T ABLE 1

Packaged Software Functional Taxonomy, 2007: Applications by
Secondary Market

Enterprise Customer
Resource Supply Chain Operations and Relationship
Consumer Collaborative Content Management Management Manufacturing Engineering Management
Applications Applications Applications Applications Applications Applications Applications Applications

Consumer Integrated Content Financial Logistics Services Mechanical Sales
software collaborative management accounting operations CAD
environments applications management

Messaging Authoring Human Production Manufacturing Mechanical Marketing
applications and capital planning CAE
publishing management
software

Team Search and Payroll Inventory Other back Mechanical Customer
collaborative discovery management office CAM service
applications

Conferencing Enterprise Procurement Product Contact
applications portals information center
management
(PIM)

Other Order Other
collaborative management engineering
applications

Financial
performance
and strategy
management
applications

Project and
portfolio
management
(PPM)

Enterprise
asset
management

Source: IDC, 2007

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T ABLE 2

Packaged Software Functional Taxonomy, 2007: Application Development
and Deployment Software by Secondary Market

Information
and Data Application Application Other Data Access,
Management Development Quality and Life- Deployment Development Analysis, and
Software Software Cycle Tools Software Tools Delivery

Relational Unified Automated Application server Other End-user query,
database development software quality software programmer reporting, and
management environments (ASQ) platforms development analysis
systems tools and utilities
(RDBMS)

Nonrelational Third-generation Software Integration server Advanced
database languages (3GLs) configuration software analytics software
management management platforms (ISSPs)
systems (SCM)

Database Software Message- Spatial
development construction oriented information
and components middleware management
management
tools

Data integration Analysis, Transaction
and access modeling, and server
software design tools middleware

Web site design/ Industry-specific
development application
tools deployment
software

Application
deployment
adapters/
connectors

Source: IDC, 2007

©2007 IDC #205437 7

T ABLE 3

Packaged Software Functional Taxonomy, 2007: System Infrastructure Software
by Secondary Market

System and Network
Management Software Security Storage Software System Software

Event automation Identity and access Data protection and recovery Operating systems and
management software subsystems

Job scheduling Secure content and threat Storage replication software Clustering and availability
management software

Output management Security and vulnerability Archive and HSM software Virtual user interface
management software

Performance Other security software File system software Virtual machine software
management

Change and configuration Storage management Remote control software
management software

Problem management Storage infrastructure Other system software
software

Network management Storage device management
software software

Other storage software

Source: IDC, 2007

Software Taxonomy Functional Market
Changes for 2007

IDC's software functional market taxonomy is updated annually to reflect the dynamic
nature of the software marketplace. This section describes the significant structural
changes made in 2007. For reference, the previous version of the software taxonomy
is documented in IDC's Software Taxonomy, 2006 (IDC #34863, February 2006).
Note that in addition to structural changes, some markets were renamed and
definitions were updated to reflect the evolution of specific market categories.

The software taxonomy changes for 2007 are relatively few in comparison with previous
years. They can best be characterized as relating to consolidation or clarification of
market categories. For example, the previous content access tools market was
renamed as search and discovery to more accurately reflect the functionality of
applications included within it. This renamed market (along with enterprise portals) was
moved to the content applications secondary market because these markets have

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evolved to become more closely aligned with content management than with the former
information access and delivery secondary market — which is now termed data access,
analysis, and delivery to denote the change in coverage.

As an example of consolidation, four previously defined database markets (pre- and
postrelational, object-oriented, XML, and end user) have been aggregated as the
single nonrelational database management market.

All of the functional market structural changes for 2007 are summarized in Table 4.

T ABLE 4

Summary of Software Functional Market Changes for 2007

2006 Market 2007 Market Comments

Applications

Content access tools Search and discovery Name changed and market moved from
information access and delivery (an
AD&D secondary market) to content
applications to better reflect market
coverage

Translation/globalization Search and discovery Translation/globalization market merged
into search and discovery market

Enterprise portals No name or definition change Market moved from information access
and delivery (an AD&D secondary
market) to content applications to better
align with associated markets

Financial applications Financial accounting applications Renamed (no change in coverage) to
provide clear differentiation from the
financial performance and strategy
management applications market

Business performance Financial performance and strategy Name changed to better denote
management and financial analytic management applications coverage area
applications

Application development and
deployment

Pre- and postrelational DBMS, Nonrelational database management Small database markets consolidated
object-oriented DBMS, XML systems
database management, end-user
DBMS

©2007 IDC #205437 9

T ABLE 4

Summary of Software Functional Market Changes for 2007

2006 Market 2007 Market Comments

Information access and delivery Data access, analysis, and delivery Secondary market name changed to
denote that the content access tools and
enterprise portals markets are no longer
included in this secondary market (see
comments in previous Applications
section of this table)

Content access tools and Moved to applications See comments in previous Applications
enterprise portals section of this table

System infrastructure software

Network and service management Network management software Name changed to better denote
coverage area

Security software Security Secondary market name changed for
clarification — no change in coverage
from 2006; security appliance revenue is
included in this market

Secure content management, Secure content and threat management Markets merged
threat management

Enterprise connectivity software Other system software Enterprise connectivity software market
merged into other system software
market

Remote control software No name or definition change Market moved to system software
secondary market — there is no longer
a networking software secondary market

Source: IDC, 2007

Applications Market Definitions

Packaged application software includes consumer, commercial, industrial, and
technical programs and codesets designed to automate specific sets of business
processes in an industry or business function, to make groups or individuals in
organizations more productive, or to support entertainment, education, or data
processing in personal activity. The packaged application market includes the
consumer, collaboration, content, and enterprise applications subsegments; the
enterprise applications market, in turn, is made up of the enterprise resource
management, supply chain management, operations and manufacturing, engineering,
and CRM applications markets.

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Consumer Applications
Consumer applications are software products for recreation, education, and/or
personal productivity enhancement.

Consumer Software

The consumer software market includes home education/edutainment products sold
to homes for specific educational purposes (for either adults or children) or reference
(e.g., dictionaries and encyclopedias); games and entertainment (sports,
adventure/role playing, arcade/action, strategy, and family entertainment
applications); and home productivity that covers the software categories of home
creativity, including all help, how-to, and lifestyle applications (e.g., cookbooks);
personal productivity products, including resume writers, standalone calendars,
expense records, will makers, and family-tree makers; and personal finance and tax
preparation programs. The following are representative vendors and products in the
consumer applications software market:

! Electronic Arts (SIMS 2)

! Intuit (Quicken)

! Microsoft (Encarta)

Note: IDC does not provide detailed functional analysis of the consumer applications
market but tracks related revenue to provide a holistic view of the industry because
some software providers market consumer, collaboration, content, and enterprise
applications as well as other types of software.

Collaborative Applications
Collaborative applications enable groups of users to work together by sharing
information and processes. Definitions of collaborative applications market are
presented in the following sections.

Integrated Collaborative Environments

Integrated collaborative environments (ICEs) provide a framework for electronic
collaboration, typically within an organization, based on shared directory and
messaging platforms. The core integrated-functionality areas are email, group
calendaring and scheduling, shared folders/databases, threaded discussions, and
custom application development. Administration and customization are generally
performed by centralized IT staff. The following are representative vendors and
products in this market:

! IBM (Lotus Domino/Notes)

! Microsoft (Exchange/Outlook)

! Novell (GroupWise)

©2007 IDC #205437 11

Messaging Applications

Messaging applications consist of the submarkets discussed in the following sections.

Standalone Email Applications

Standalone email applications provide a platform based on a message store, a
message transfer agent (MTA), a directory, and access protocols for use by
enterprises or service providers to host email users over a local or wide area network,
the Internet, or a dial-up connection. The following are representative vendors and
products in this submarket:

! Critical Path (Memova)

! Mirapoint (Message Server)

! Openwave (Email Mx and Mobile Email)

! Sun (Java Systems Messaging Server)

Instant Messaging Applications

Instant messaging applications provide instantaneous text messaging between users
who are online. Instant messaging management products are deployed in conjunction
with an EIM application server or service to provide enhanced management, mobility,
security, connectivity, or regulatory compliance. The following are representative
vendors and products in these submarkets:

! FaceTime (Enterprise Edition)

! IBM (Lotus Sametime)

! Jabber (XCP)

! Microsoft (Office Communications Server and Office Live Communications
Server)

Unified Messaging Applications

Unified messaging applications provide a single mailbox for email, fax, and voice
messages accessible by PC, Web browser, and telephone. The following are
representative vendors and products in this submarket:

! Avaya (Modular Messaging System, Unified Messaging, Communications
Center)

! Cisco (Unity Unified Messaging)

! Microsoft (Exchange Unified Messaging

! Nortel (CallPilot Unified Messaging)

12 #205437 ©2007 IDC

Team Collaborative Applications

Team collaborative applications (TCAs) provide an integrated set of Web-based tools
for collaboration among team members from one or more organizations. The core
integrated functionality areas are shared work spaces for managing and sharing files,
assigning and coordinating tasks, and maintaining other project and team information.
User and workspace administration, configuration, and customization are generally
performed by individual users. Although all work asynchronously, several have added
real-time collaborative tools. The following are representative vendors and products in
this market:

! EMC (Documentum eRoom)

! IBM (Lotus QuickPlace)

! Interwoven (WorkSite)

Collaborative applications designed for a particular vertical market such as
manufactured product design or life-cycle development (product data management
[PDM] and product life-cycle management [PLM]) are not included here.

Conferencing Applications

Conferencing applications provide a real-time connection for the exchange, creation,
and viewing of information by two or more users during scheduled or spontaneous
online meetings or events. The following are representative vendors and products in
this market:

! Cisco (MeetingPlace)

! IBM (Lotus Sametime)

! Microsoft (Office Live Meeting, Office Communications Server)

! SABA (Centra 7, Symposium, Online Business Collaboration)

! WebEx (Meeting Center, Event Center, Enterprise Edition)

Other Collaborative Applications

Other collaborative applications include group calendaring and scheduling
applications as well as those designed specifically for collaborative applications to
provide enhanced capabilities such as workflow and imaging. (General-purpose
applications are not included here.) The following are representative vendors and
products in this market:

! Sun (Java System Calendar Server)

Content Applications
Content applications include content management software, authoring and publishing
software, search and discovery software (including translation and globalization

©2007 IDC #205437 13

software), and enterprise portals. The specific market definitions are presented in the
following sections.

Content Management

Content management software builds, organizes, manages, and stores collections of
digital works in any medium or format. The software in this market includes document
management, Web content management, capture and image management, digital
asset management, and electronic records management. Content management forms
the foundation or the infrastructure for knowledge management.

Applications in this market include one or more of the following functions:

! Gathering and feeding documents and other media into collections via crawlers
or other automated and/or manual means and performing metadata
capture/enrichment, formatting, transformations, and/or conversion operations.

! Organizing and maintaining information, including some or all of the following:

# Indexing, cataloging, and/or categorizing information in the content
management system

# Building directories

# Defining workflows for tracking documents and changes and sending alerts
when action is required

# Record keeping, auditing, and logging

# Updating and purging content

# Searching for information in the content management system (embedded
tools may be provided)

! Ensuring document security by managing rights and permissions to create, edit,
post, or delete materials; managing user access; and protecting intellectual
property

Representative vendors in this market include:

! Web content management, document management, capture and image
management, and records management: Alfresco, CoreMedia, CrownPeak,
Day Software, Ektron, EMC/Documentum, Fatwire, Hyland Software,
IBM/FileNet, Inmagic, Interwoven, Kofax, Mediasurface, Meridio, Microsoft,
Mobius Management Systems, Open Text/Hummingbird/RedDot, Oracle/Stellent,
Percussion Software, Tridion, Vignette, Xerox, and ZyLAB

! Digital asset management: Autonomy, Blue Order, Canto, Chuckwalla,
ClearStory Systems, Dalet, EMC/Documentum, Extensis, Harris, IBM,
Interwoven/MediaBin, Konan Digital, North American Systems/Ancept, North
Plains Systems, Open Text/Artesia, Siemens, Venaca, and WAVE

14 #205437 ©2007 IDC

Authoring and Publishing Software

Authoring and publishing software is defined as software used to create, author, edit,
and publish content, including text documents, spreadsheets, presentations, images,
audio, video, and XML-structured documents. It does not include the software used to
design Web sites. Authoring and publishing software is further segmented into six
categories with representative vendors and products:

! Office suites include word processors, spreadsheets, and presentation software
(e.g., Microsoft Office [not including Access], Corel WordPerfect, and IBM Lotus
1-2-3).

! Graphic design and layout includes image editing software, and layout and
design software (e.g., Adobe Creative Suite, Apple Aperture, Corel CorelDRAW,
and Quark QuarkXPress).

! Compound document includes manual XML authoring software as well as
software for the automated and semiautomated generation of paginated,
structured electronic documents from content components (e.g., Adobe
FrameMaker, Adobe LiveCycle, Adobe Central Pro Output Server, JustSystems
XMetaL, Exstream Dialogue, PTC Arbortext Advanced Print Publisher and
Arbortext Publishing Engine, and StreamServe EDP).

! Forms design and input software includes software to design forms and render
the forms for display and enter data into the forms but not to route, manage, or
process the forms beyond form-level validation or actions (e.g., Adobe LiveCycle
Forms, Adobe Acrobat Reader, Autonomy [Cardiff] LiquidOffice Form Designer,
IBM [PureEdge] PureXML, and Microsoft InfoPath).

! Audio/video (AV) authoring software lets professionals and advanced
consumers edit, manipulate, and assemble audio and video content, including
the creation of custom professional CDs and DVDs (e.g., Adobe's Premiere,
Encore DVD, and Audition; Apple's Final Cut Pro, Shake, and DVD Studio Pro;
Autodesk's Max, Maya, and VIZ; and AVID Liquid and Media Composer).

! Information diagramming applications provide for the diagramming and visual
representation of information (e.g., Microsoft Visio, Mindjet MindManager, and
TheBrain BrainEKP).

! Other authoring tools include tools for creating learning management systems
content, online help, and other types of content (e.g., Adobe Captivate, Adobe
RoboHelp).

Search and Discovery

Search and discovery applications create access to unstructured information. They
also provide alternative access to structured data. This group of software applications
analyzes, tags, and searches text, often in multiple languages, and rich media such
as audio files, video, and image files. This market also includes extended search
platforms, search engines, question-answering applications, categorization/metadata
tagging tools, categorizers and clustering engines, visualization tools for information
navigation and analysis, filtering and alerting tools text analytics and, beginning in

©2007 IDC #205437 15

2007, translation and globalization software (which were formerly covered as a
separate functional market). The following are the major submarkets and
representative vendors for the search and discovery market:

! Search engines, platforms, and applications: Autonomy, FAST, Endeca,
Google, IBM, Inxight, Coveo, and Vivisimo

! Text mining and text analytics: NStein, ClearForest, Insightful, Inxight,
Attensity, SAS, and SPSS

! Browsing and guided navigation: Endeca and Siderean

! Categorizers and clustering engines: NStein, Recommind, Lexalytics, Stratify,
and Vivisimo

! Question answering: Inxight, NStein, Clearforest, Attensity and InQuira

! Language analyzers: Basis Technologies and Inxight

! Translation and globalization software: Systran, SDL, Idiom, Basis

Enterprise Portals

Enterprise portals integrate access to information and applications and present it to
the business user in a useful format. This software is used by business users but
includes IT administration tools and natively has some level of the following
functionality:

! Role-based or rule-based administration

! Collaboration functionality

! Content management and access

! Access to structured data such as end-user query and reporting

The following are representative vendors in this market: BEA, IBM, Microsoft, Oracle,
SAP, Sun, and Vignette.

Enterprise Resource Management Applications
Enterprise resource management applications are designed to automate and optimize
business processes related to resources required to meet business or organizational
objectives but are not customer or prospect facing or specialized to various types of
engineering. The resources automated include people, finances, capital, materials,
and facilities. The resulting applications forecast, track, route, analyze, and report on
these resources. The market includes software that is specific to certain industries as
well as software that can handle requirements for multiple industries.

Definitions of the relevant functional application segments are presented in the
following sections.

16 #205437 ©2007 IDC

Financial Accounting Applications

Financial applications are designed to support accounting, financial, and treasury and
risk management functions. The financial applications market consists of the
submarkets discussed in the following sections.

Accounting

Accounting software supports general financial management business processes
such as accounts payable, accounts receivable, general ledger, and fixed asset
accounting, as well as more specialized functions such as credit and collections
management and automation, dispute resolution, enterprise spend management,
project accounting and costing, tax and revenue management and reporting, nonprofit
fund accounting, point of sale, invoicing, electronic bill presentment and payment, and
transactional financial reporting and business intelligence embedded into accounting
applications. The following are representative vendors and products in this
submarket:

! Epicor (Epicor Financials Suite)

! Microsoft (accounting modules in Dynamics GP, AX)

! Oracle (E-Business Suite Financials)

! Sage Software (FAS Fixed Assets)

! SAP (financials modules in mySAP ERP 2005)

Treasury and Risk Management

Treasury and risk management applications support corporate treasury operations
(including the treasuries of financial services enterprises) with the corresponding
financial institution functionality and optimize related cash management, deal
management, and risk management functions as follows:

! Cash management automation includes several treasury processes involving
electronic payment authorization, bank relationship management, cash
forecasting, and others.

! Deal management automation includes processes for the implementation of
trading controls, the creation of new instruments, market data interface from
manual or third-party sources, and others.

! Risk management automation includes performance analysis, Financial
Accounting Standard (FAS) 133 compliance, calculation of various metrics used
in fixed-income portfolio analysis, market-to-market valuations, and others.

The following are representative vendors and products in this submarket:

! SunGard eTreasury eXchange (eTx) with AvantGard enterprise applications

! Thomson Financial Treasury Solutions

©2007 IDC #205437 17

! Wall Street Systems Treasury

Human Capital Management

Human capital management (HCM) applications software automates business
processes that cover the entire span of an employee's relationship with the
corporation (as opposed to the department or group to which the employee belongs)
as well as management of other human resources used by the enterprise (e.g.,
contingent labor, contractors, and consultants), including — increasingly — human
resources employed by suppliers and customers. The center of the HCM applications
suite is designed for core HR functions such as personnel records, benefits
administration, and compensation. Increasingly, these functions are being delivered
as employee self-service or manager self-service in order to automate record keeping
and updating as well as consolidated reporting. The following are representative core
HR applications vendors:

! Kronos Workforce HR, Employee, Manager

! Lawson Human Capital Management

! Oracle Enterprise HCM Suite

! SAP Human Capital Management

! Ultimate Software Ultipro

Globalization, flexible work rules, job mobility, and the strategic importance of people
assets have forced organizations to transform their human resources systems into a
more real-time, personalized, and operational intelligence business function that goes
beyond the traditional view of aggregating personnel data. Core HR functions are
being supplemented by extensions that form the basis of a new generation of HCM
applications framework. The extensions are categorized in four major segments or
submarkets: erecruiting, incentive management, performance management, and
workforce management. Increasingly, core HR applications are also adding selective
and functional-equivalent features of these HCM extensions to meet changing
customer requirements. The following sections describe the functional aspects of
these HCM extensions.

eRecruiting

eRecruiting applications are designed to automate the recruitment process through
better tracking of applicants, screening and skills assessment, profiling and resume
processing, and identifying talents inside or outside the organization.

Key features include:

! Managing skills inventories

! Creating and managing job requisitions

! Identifying appropriate employment candidates

18 #205437 ©2007 IDC

! Coordinating team collaboration within hiring processes

! Facilitating resource planning

! Deploying workers to appropriate jobs, projects, or teams

Representative erecruiting applications include:

! Kronos Workforce Acquisition

! Peopleclick Recruitment Management

! Taleo Enterprise Staffing Management

Incentive Management

Incentive management applications are designed to automate the process of
providing cash and noncash incentives to employees, partners, and external users
through advanced modeling, reporting, and built-in interfacing to payroll processing
systems.


! Quota and territory management

! Calculation and distribution of commissions, spiffs, royalties, incentives to
employees, and channel and business partners

! Compensation analysis using internal and external data for retention risk analysis

! Linking incentives — cash and noncash — to business objectives

! Payroll and payment engine interfaces

! Account payables integration

Representative incentive management applications include:

! Authoria Compensation Advisor

! Callidus TrueComp

! Synygy EIM

HR Performance Management

HR performance management applications are designed to automate the aggregation
and delivery of information pertinent to the linking of job roles and the mission and
goals of the organization. More specifically, the system allows users to automate the
performance review process by using mechanisms such as training and key
performance indicators (KPIs) to constantly track and monitor the progress of an
individual employee, work team, and division.

©2007 IDC #205437 19


! Assessment of individual and organizational skills gaps that impede performance
and job advancement, as in ability testing

! Continuous reviews and establishing milestones

! 360-degree evaluation and real-time feedback

! Performance appraisal automation

! Competency assessment and management

! Goal setting and tracking

! Employee surveys

! Alignment of human assets to corporate objectives

! Learning development and career improvement programs

! Fast tracks for top performers

! Delivering training based on certification requirements

! Succession planning

Representative performance management applications include:

! Kenexa Career Tracker

! SHL Group Objective Assessment

! Witness Systems Equality Contact Store

Workforce Management

Workforce management applications are designed to automate the deployment of the
workforce through workload planning, scheduling, time and attendance tracking,
resource management, and rules and compliance management. Increasingly,
workforce management applications are being integrated into customer relationship
management applications in a contact center environment. Through extensive use of
workforce management applications, organizations are also able to develop training
guidelines, career advancement plans, and incentive compensation programs to
improve, motivate, and sustain the quality of their employees.


! Skills and certification tracking

! Shift/vacation bidding

! Workload planning, forecasting, and scheduling

20 #205437 ©2007 IDC

! Scheduling optimization

! Customer wait-time forecasts

! Coverage management

! Absence management

! Labor activity tracking

! Rationalization of revenue per full-time equivalent

! Cost of sales activities

! Sales resource planning based on local and regional opportunities

Representative workforce management applications include:

! Eclipsys Sunrise Enterprise Scheduling

! Kaba Benzing B-Comm for R/3, Enterprise Data Collection

! Kronos Workforce Central

! Witness Blue Pumpkin Director Enterprise, Activity Manager, Advisor Express

! Workbrain Enterprise Workforce Management

Payroll

The functionality involves payroll processing and other labor-related payments,
including tracking of stock-option compensation and other variable and nonvariable
payments. The following are representative vendors and products in this market:

! CBS Payroll from Intuit

! Oracle Enterprise HCM and Global Payroll

! Ultimate UltiPro Payroll Administration and Tax Management

Procurement

Procurement applications automate business processes relating to purchasing
material (whether direct or indirect; raw, in process, or finished; as a result of or
flowing into a product supply chain–specific business process; or in support of
performing a service) and services (business or professional). With the advent of the
Internet, the procurement function is being expanded to cover Web-based sourcing,
procurement, transaction processing, and payment support, all of which are
connected to create a single view of the spending levels at a company. As a result,
purchasing activities are integrated into a supplier community that can be easily
tracked, benchmarked, and analyzed by both buyers and suppliers.

Existing and upcoming features of these procurement modules include:

©2007 IDC #205437 21

! eProcurement

! Self-service requisitioning

! Order entry (PO email)

! Approvals, workflow

! Transaction processing, EDI, EDI-INT

! Procuring configurations

! Global agreements, time-phased pricing, mass update price

! eSourcing

! Strategic sourcing

! Dynamic pricing

! eRFX

! Product design management

! Commodity strategy, spot buying

! Contract compliance

! Contract library

! Contract management, tracking, enforcement

! Content management

! Standardization, function equivalent

! Consolidated buy/group purchasing organizations

! Data synchronization and management

! Item master cleansing

! Category management for commodity buying

! Catalog aggregation, syndication

! Supplier performance management

! Supplier enablement, portal

! Vendor-managed inventory support

! Supplier performance tracking

22 #205437 ©2007 IDC

! Supplier consolidation

! Supplier satisfaction metrics

! Machine-to-machine connection such as EDI exchanges

! Electronic invoice presentment and payment/dispute resolution

! Volume discount discovery

! Consolidation of accounts

! Invoice, PO, multiple document matching

! Standard applications templates for exceptions handling

! Procurement analytics

! Integrated analytics

The following are representative vendors and products in this market:

! Ariba (Enterprise Spend Management)

! Infor (SmartStream Procurement)

! Lawson (M3 Procurement)

! Oracle (Oracle Advanced Procurement)

! SAP (mySAP SRM)

Order Management

Order management applications are designed to automate sales order processing
from capture to invoice and settlement as well as built-in features to handle order
planning and demand management capabilities. Item lookup and order placement are
the prerequisites of order management applications, followed by issuance of receipts
and advance shipping notices as well as payment processing functions. Increasingly,
Web-based order management applications are replacing legacy systems for faster
and more accurate order processing. Order and product configurations, as well as
pricing options, freight calculation, and credit checking, are being combined to form
an integrated order management application, regardless of the sales channels.

Other features include view price history, profit management, multiple order types
(including quotes and credit orders), blanket and release orders, direct ship and
transfer orders, kit processing, and product returns processing.


! Comergent (Ebusiness Suite Order Management)

! Manhattan Associates (Distributed Order Management)

©2007 IDC #205437 23

! Oracle (Enterprise One Sales Order Management)

Financial Performance and Strategy Management Applications

The financial performance and strategy management applications market consists of
cross-industry applications whose main purpose is to measure, analyze, and optimize
financial performance management processes using prepackaged applications that
include the following:

! Budgeting and planning includes applications to support operational budgeting
processes, corporate budget consolidation and adjustment processes, and
planning and forecasting processes.

! Financial consolidation includes applications that support both statutory and
management financial consolidation, reporting, and adjustment processes across
multiple entities and divisions.

! Profitability management and activity-based costing applications include
packaged applications to support detailed cost and profitability measurement and
reporting processes.

! Strategy management applications include those that support a closed-loop
performance management strategy such as the balanced scorecard. Strategy
management applications incorporate domain expertise across a range of
business processes, such as finance, human resources, operations, and CRM,
but enable strategic management processes rather than performance
management reporting processes of these functions.


! Cartesis (Financial Control and Reporting)

! Hyperion (such as Financial Management, Planning, and Customer Profitability)

! Longview (Budgeting/Planning/Forecasting)

! Oracle (Enterprise Planning and Budgeting)

! PerformanceSoft (formerly Panorama Business Views [pbviews])

! SAP (SEM)

! SAS (Financial Intelligence and Performance Management)

Project and Portfolio Management

Project and portfolio management (PPM) applications are used for automating and
optimizing the initiating, planning/scheduling, allocation, monitoring, and measuring of
activities and resources required to complete projects. In addition, the portfolio
management capabilities enable the tracking of an aggregation of project, products,
programs, and/or initiatives to oversee resource allocation, for making ongoing
investment and prioritization decisions, and to track risks — as part of an overall
portfolio. Ultimately, PPM applications help organizations to manage the scope, time,
and cost of discrete sets of related people processes (projects) on an individual and

24 #205437 ©2007 IDC

portfolio basis. IDC uses a wide definition of PPM to include the breadth of solutions
that use PPM features at their core, such as construction/architectural/engineering
management (AEC), asset/capital management (A/C), IT project portfolio management
(ITPPM), new product development/introduction management (NPDI), professional
service automation (PSA), and other industry-oriented solutions developed around the
primary premise of successful "project" completion as the main business purpose. The
following are representative vendors and products in this market:

! CA Clarity Portfolio Manager and Clarity Project Manager (former Niku)

! Deltek Vision

! Meridian Proliance

! Microsoft Office Project

! Oracle Projects

! Primavera Project Management

! PTC ProjectLink

! SAP xRPM (Resource and Portfolio Management)

Enterprise Asset Management

Enterprise asset management application software automates the many aspects of
asset management and maintenance, repair, and overhaul (MRO) operations (e.g.,
machinery and equipment, buildings, or grounds). The software generally includes
functionality for planning, organizing, and implementing maintenance activities,
whether they are performed by employees of the enterprise or by a contractor.
Typical features include equipment-history record management, descriptions of items
maintained, scheduling, preventive and predictive maintenance on the assets, work
order management, labor tracking (if integrated within the maintenance management
applications), spare parts management, and maintenance reporting. The following are
representative vendors and products in this market:

! Avexus

! IBM Tivoli MAXIMO

! Indus International

Supply Chain Management Applications
Supply chain management application software automates supply- and demand-side
business processes that bring a product or service to market, including multisite
organizations involved in a complex supply chain process, including raw materials
suppliers, contract manufacturers, 3PL and 4PL providers, and individual
transportation and warehousing organizations. Definitions of the relevant functional
application markets are presented in the following sections.

©2007 IDC #205437 25

Logistics

Logistics application software automates activities relating to moving inventory or
materials of any type. Examples include software that automates distribution resource
planning, warehouse management, and transportation planning business processes
that are not specific to an industry. (Logistics applications specific to the
transportation industry are included in the services operations management
applications market.) The following are representative vendors and products in this
market:

! Four Soft, 4S eTrans, and 4S i.Logistics Drive

! JPMorgan Chase Vastera, Tradesphere products

! Manhattan Associates, Transportation Management, Carrier Management,
Reverse Logistics Management, and Trading Partner Management

! RedPrairie, Optimized Transportation, Global Trade Management, In-Transit
Control, Freight Settlement

Production Planning

Production planning (PP) applications software automates activities related to the
collaborative forecast and continuous optimization of manufacturing processes. PP
applications span supply planning, demand planning, and production planning within
organizations. These applications identify demand signals, aggregate historical data
that informs short- and long-term demand expectations, and provide supplier
capabilities across multiple manufacturing sites. Production planning application
software is key to any supply chain management initiative because supply and
demand planning dictates the rest of the supply chain activities. The following are

! Aspen Supply Planner and Aspen Plant Scheduler

! Oracle Advanced Planning and Scheduling (APS)

! SAP Advanced Planning and Optimization (APO)

Inventory Management

Inventory management application software automates activities relating to managing
physical inventory, whether direct or indirect; raw, in process, or finished; as a result
of or flowing into a product supply chain–specific business process; or in support of
performing a service. This includes inventory control/materials management business
processes in any industry, not just in manufacturing. The following are representative
vendors and products in this market:

! Catalyst CatalystCommand Warehouse Management

! SAP Inventory Management

! SmartOps Multistage Inventory Planning and Optimization

26 #205437 ©2007 IDC

! SSA Global (acquired by Infor in 2006) SCM Warehouse Management

Operations and Manufacturing Applications
Operations and manufacturing applications are enterprise applications that automate
and optimize processes related to planning and execution of services operations and
manufacturing activities, as well as other back-office activities. The resources
automated include people, capital, materials, and facilities. The applications track,
route, analyze, and report on these resources. The market includes software that is
specific to services, manufacturing, and other industries. Definitions of the relevant
functional application segments are presented in the following sections.

Services Operations Management

Services operations management applications support the services supply chain and
are unique to particular industries. These industry-specific applications cover a broad
range of activities such as automating claim processes (as applied to insurance
functions), automating admissions/discharges and transfers of patients (as applied to
healthcare functions), or automating energy trading (as applied to energy and utility
functions). Other examples of industry-specific applications are those that enable the
automation of real estate, business, legal services, banking and finance, education,
government, social services, and transportation. The following are representative
vendors and products in this market:

! ADP (Claims Services applications)

! Cerner Corp. (Millennium)

! SunGard (Entegrate applications)

Manufacturing

Functional applications in manufacturing include material and capacity requirements
planning (MRP), bills of materials (BOMs), recipe management, manufacturing
process planning and simulation, work order generation and reporting, shop floor
control, quality control and tolerance analysis, and other functions specific to
manufacturing execution (MES). The category does not include computer-aided
manufacturing (CAM) applications for NC and CMM machine programming.
(Advanced planning and scheduling applications are included in the supply chain
planning functional market.) Representative vendors and products in this market are:

! Aspen Technology aspenONE solutions

! Dassault/DELMIA production process planning and simulation applications

! UGS/Tecnomatix Assembly Planning

Other Back Office

Other back-office applications include various types of application automating
functions not otherwise covered previously, such as computer-based training,
elearning applications, speech and natural language, and environmental health and
safety applications. These applications also cover a wide range of point solutions for

©2007 IDC #205437 27

product-related applications other than services operations management and
manufacturing. These applications have at their core a product orientation focused on
efficiencies related to item maintenance, replenishment, and site management.
Among them are retail-specific and wholesale-specific applications. Representative
vendors and products in this market are:

! JDA Software Portfolio Solutions

! NSB Retail Systems Connected Retailer Solutions

! Oracle Retail Merchandise Operations Management

! SAP EH&S

Engineering Applications
Engineering applications automate all of the business processes and data
management activities specific to ideas management, concept planning, and design
and the handoff of a design to execution (manufacturing, construction, or other). The
markets include mechanical computer-aided design (MCAD), CAM, computer-aided
engineering (CAE), product information management (PIM), and other engineering
applications, which include those for electronic design automation (EDA) and
architecture/engineering/construction (AEC). Definitions of the engineering application
segments are presented in the following sections.

Mechanical Computer-Aided Design

MCAD software is utilized for tasks typically performed by designers and drafters.
Specifically, this category includes computer-assisted designing, drafting, and
modeling (wire frame, surface, and solid). MCAD also includes conceptual design
and/or industrial design, animation and visualization, and assembly design. (Light
geometry visualization such as UGS' JT, Agile's AutoVue, or Autodesk's DWF is
included in PIM.) The following are representative vendors and products in this
market:

! Dassault Systèmes Catia and SolidWorks applications

! PTC Pro/Engineer applications

! UGS NX and Velocity applications

Mechanical Computer-Aided Engineering

Mechanical CAE applications address tasks such as structural/stress analysis,
kinematics, fluid dynamics, thermal analysis, and test data analysis. The following are

! ANSYS analysis products

! Moldflow Corp. plastic moldflow analysis

! MSC Software NASTRAN and PATRAN analysis products

28 #205437 ©2007 IDC

Mechanical Computer-Aided Manufacturing

Mechanical CAM applications prepare data for actual production on the shop floor
(e.g., NC tape generation and data for CNC machines). The following are

! CimatronE NC

! CNC Software MasterCAM

! UGS CAM applications

Product Information Management

PIM applications provide engineering groups, but also increasingly cross-disciplinary
teams across the enterprise as well as outside of its four walls, with software tools to
electronically coordinate, manage, and share product data throughout the product life
cycle. The major subsegments of this market are product data vaulting, document
management, light geometry with view/markup capabilities, change management,
and parts libraries. Ideas management and product-focused environmental
compliance management are now emerging as additional application subsegments.

! Agile Software Autovue product line

! IDe IdeWeb for idea and innovation management

! UGS TeamCenter

Note: The aggregation of MCAD, CAE, CAM, and PIM applications is termed the
collaborative product development applications market by IDC.

Other Engineering

Other engineering applications support electronic design automation,
architectural/engineering/construction, and other engineering functions. AEC
applications software automates drawing/design of building- and civil engineering–
related projects. (AEC project and portfolio planning and facilities management are
part of the project and portfolio management functional market.) The following are

! Autodesk civil engineering applications

! Bentley Systems civil engineering applications

EDA application software includes applications for component and board/systems
design. Functions include simulation, design creation, synthesis, layout, design
verification, and analysis. Representative vendors and products in this market include
applications from Cadence, Mentor, and Synopsys. (IDC does not provide detailed
functional analysis of the EDA applications market.)

©2007 IDC #205437 29

Customer Relationship Management Applications
CRM enterprise applications automate the customer-facing business processes within
an organization irrespective of industry specificity (i.e., sales, marketing, customer
support, and contact center). Collectively, these applications serve to manage the
entire life cycle of a customer — including the conversion of a prospect to a customer
— and help an organization build and maintain successful relationships. The CRM
applications classified as collaborative provide functionality to enable two or more
individuals to share content to achieve a common goal. Definitions of CRM
application segments are presented in the following sections.

Sales

Sales automation applications include both sales management applications and sales
force automation applications. Functionality includes the following:

! Account/contact management

! Lead tracking

! List management

! Mobile sales

! Opportunity management

! Partner relationship management (PRM)

! Sales analysis and planning tools

! Sales configuration tools

! Sales history

! Team selling

! Telemarketing and telesales scripting

! Territory management


! Oracle (Oracle Sales, Oracle's Siebel Sales)

! Salesforce.com (Sales Force Automation)

! SAP (mySAP Sales and xApp Mobile Sales)

! The Sage Group PLC (ACT! by Sage, Sage CRM SalesLogix)

30 #205437 ©2007 IDC

IDC's software taxonomy, 2007

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IDC's software taxonomy, 2007