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TECH SUPPLIER Jul 2019 - Market Share - Doc # US44637319

Worldwide Automated Software Quality Market Shares, 2018: Year of Acquisitions and Continuous Testing

By: Melinda-Carol BallouResearch Director, Agile ALM, Quality & Portfolio Strategies

Abstract

This IDC study provides an analysis of the 2018 automated software quality (ASQ) vendor market share. It discusses IDC's ASQ assessment with specific vendor analysis for a market that continued with improved single-digit growth of 3.1% to $2.7 billion in 2018 compared with growth of 4.5% to $2.6 billion in 2017. As organizations continued to invest in ASQ solutions to address increased complexity across a variety of vectors (including business, technology, software sourcing, and diverse platform deployment with mobile, social business, and cloud), with few exceptions, most major share ASQ solution providers experienced some revenue increases because of an improving though still volatile economy. Others experienced losses largely because of evolving product releases, shifts to cloud delivery models, acquisition transitions, and some encroachment by open source tools, including major revenue player Micro Focus (combined with HPE) at 20.2% share (down from 23.6% share for combined Micro Focus HPE revenue in 2017 and from 25.5% share in 2016). Microsoft held steady with growth of 9.7% growth an improved share. IBM at 7.9% share was largely flat but experienced some growth of 2.4% in 2018, according to IDC estimates. Midsize innovative vendors in emerging technology areas like mobile, software quality analysis and measurement (SQAM), and cloud testing contributed to enable improved ASQ growth in 2018. We are also observing the impact of OSS usage and integration by vendors (such as Selenium and Cucumber). We also saw acquisitions moving into 2018 and during 2H18. These included Perforce's acquisition of Perfecto Mobile in 2H18 (see Perforce Acquires Perfecto Mobile Seeking to Perfect Its Mobile and Digital Quality Strategy for DevOps, IDC #lcUS44391818, October 2018) and Perforce's more recent acquisition of Rogue Wave including Coverity (1H19). Earlier, moving into 2018 during the latter part of 2017, we saw the shifting of resources for HPE to Micro Focus for its ASQ and other assets, and the transition to HCL developers for IBM Rational's Quality and other assets, and leverage of quality analysis vendor Coverity in the embedded space, with Synopsys augmenting its 2014 Coverity acquisition with follow-on acquisitions of security-related and other products (e.g., Cigital, Protecode) (see Synopsys Expands Software Security Portfolio with Acquisition of Cigital Coordinating Services with Automation, IDC #US42300617, February 2017). Consolidation in the ASQ arena also included the acquisition of Klocwork by Rogue Wave (in 1Q14), the acquisition of Keynote by Dynatrace (in 3Q15) now included as part of the SIGOS portfolio, and CA Technologies' acquisition of Grid-Tools (in 2Q15) to augment the company's prior ITKO acquisition (in 2011) and BlazeMeter (in 2016). Longer term and moving into 2H19, the ASQ market is slated for an overall trajectory of growth. IDC expects ongoing acquisitions in the near term as enterprise providers seek to broaden their ASQ portfolios.

"In a global economy that grew despite remaining somewhat volatile in 2018, with ongoing, dramatically increased complexity for multimodal software development and deployment and service virtualization with constrained resources, we saw ongoing investment and demand for ASQ solutions and some growth along with acquisitions and shifting of major vendor allocations for enterprise ASQ. Market and product evolution will occur as larger vendors deliver more complete quality and life-cycle management solutions and consolidation continues," says Melinda Ballou, research director for Agile ALM, Quality, and Portfolio Strategies at IDC. "As a result of the earlier disruption and ongoing software quality challenges, we saw continuing ASQ investments. Smaller vendors continue to play a crucial role for market innovation as exemplified in cloud testing; quality measurement with static and dynamic analyses and security leverage; and agile, embedded, and mobile solutions; these areas are dominated by small and medium-sized companies. We expect additional acquisitions beyond very significant acquisition announcements last year and solid ASQ growth in this space in the 2019–2023 time frame."


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