Middleware, business process management to reach US$1.5 billion in APeJ next year

In 2013, IDC observed several high-profile management movements among the major middleware vendors as they restructured to be more relevant and aligned themselves closer to the marketplace. Coupled with uncertainties in the macroeconomic landscape and moderate expansion rates in the two large emerging Asian economies, India and China, the business process management (BPM) and middleware market in Asia/Pacific excluding Japan (APEJ) grew by just 2.2% to US$1.4 billion in 2013. 

"2013 was a year of change as the industry transforms and evolves alongside with technology advancements in the 3rd platform — cloud, mobility, big data, and social. The middleware layer is ever more so required to be robust, flexible, and scalable to handle disparate workload demands in terms of velocity, volume, and variety. This ensures the future of middleware technologies: a key enabler to cope with today's rapidly changing business environment," said Chris Zhang, Senior Market Analyst, Application Deployment Software Research, IDC Asia/Pacific.

In 2014, middleware and BPM are expected to grow at 6.2% to reach US$1.5 billion. Growth projections for this market remain positive with a compound annual growth rate (CAGR) of 7.9% and are expected to hit the US$2 billion mark by 2018.

Overall, IDC expects BPM to be the best performer in the middleware market as organisations in the region strive to stay competitive in the global landscape. Investment in process efficiency will continue to drive growth in this market. Business-to-business (B2B) middleware market is also predicted to do well as organisations aim to achieve high visibility and resiliency of their supply chains. Increased e-commerce activities in the region are also driving businesses to invest in more effective communication and collaboration systems.

In terms of technology drivers, increased market momentum and opportunities around mobility will continue to push demand for mobile application development and deployment platforms. "IDC expects vendors to expand their focus beyond the core development and deployment platform – and more on mobile device management, mobile content management (think of the DropBox phenomenon), and mobile security (spanning across identity access, policy management, and encryption capabilities)," Zhang further added.

Key points from IDC’s Asia/Pacific Semiannual Application Deployment Software Tracker include:

• Growth projections for the middleware market in APEJ remain positive with a CAGR of 7.9%. The market is expected to reach US$1.9 billion by 2018 as key economies (i.e. China and India) continue to grow
• Developing Southeast Asian countries such as the Philippines, Malaysia, and Vietnam will continue to enjoy healthy growth — a preference for appliances/converged systems (smaller cores) for fast deployments and minimal configurations is obvious in this subregion
• The De-IOE (deleting IBM, Oracle, and EMC) initiative in China is expected to influence governments and state-owned enterprises (SOEs) in adopting and supporting local solutions

The growth of the Platform as a service (PaaS) market will also continue over the forecast period with some degree of cannibalisation to the on-premise market. It is critical for vendors to recognise this trend and start to differentiate themselves in the marketplace as PaaS becomes more of a commodity.

*Notes:

1. Countries included in IDC Asia/Pacific Semiannual Application Deployment Software Tracker are Australia, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, the PRC, Singapore, Taiwan, Thailand, Vietnam and the Rest of Asia Pacific.

2. Software revenue consists of license, maintenance, and other software revenue.

3. Application Deployment Software includes Application Server Middleware and Integration & Process Automation Middleware.