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SINGAPORE'S application deployment software (ADS) - popularly known as middleware - market is expected to decline by 5.8 per cent this year as a result of the economic crisis.
Speaking to BizIT, Adren Lim, Asia-Pacific market analyst for IT research agency IDC, noted that in 2009 the Singapore ADS market is expected to shrink to US$45.9 million from US$48.7 million in 2008. Last year, the market was up 3 per cent from the 2007 level.
Mr Lim, who works in IDC Asia- Pacific's Infrastructure and Middleware Software Research section, noted that last year, the Singapore market accounted for 6.2 per cent of the Asia-Pacific, excluding Japan (APEJ) ADS market, which was worth US$789.7 million.
'The APEJ market in 2008 was up 6.7 per cent to US$789.7 million from US$740.1 million in 2007,' Mr Lim noted.
Mr Lim said that based on a compound annual growth rate (CAGR) calculation, from 2008 to 2013, the Singapore market is expected to grow at 4.9 per cent per annum, while the APEJ market as a whole will grow at a more robust 8.6 per cent per annum, pulled up by a slew of high performing markets.
He added that the Singapore middleware market experienced a noticeable slowdown in the first half of this year. 'However, we expect a pick-up in the second half,' Mr Lim said.
IDC added that in the ADS market, information growth, automation and SOA- (service-oriented architecture) based implementations were major drivers last year and will continue to be so this year.
'Compliance (financial and manufacturing) and government stimulus projects to enable more ICT (infocomm technology) dependant infrastructure are expected to drive trends this year, especially in the second half of this year and beyond,' Mr Lim said.
The analyst added: 'The ever-increasing competition in the telco space for customer base through value-added services on their products will also drive demand.'
Mr Lim pointed out that Singapore companies are using ADS to simplify their complex IT environments which are usually stacked with legacy systems. They are also using the middleware for SOA-type of implementations.
'ADS is also being used by Singaporean companies to better align with industry governance and to develop modern web services applications and social network concepts,' Mr Lim noted.
Talking about the APEJ market as a whole, Mr Lim noted that continuous application deployment projects and data warehouse implementations proved to be an essential source for growth as businesses went through overnight budget revisions and investment scopes changed during the economic crisis.
'IDC expects this market to flourish better as the economy stabilises and demand for BPM (business process management) and SaaS (software as a service) accelerates,' Mr Lim said.
There is an increasing trend of investment being channelled towards extending the stack of application deployment software to be more complete and heterogeneous, he noted.
'As such, many software vendors have been working hard at differentiating themselves in terms of cost values and performance rates.'
A recent IDC end-user research showed that 67 per cent of respondents would continue with their current plans to deploy middleware within the next 18 months. And 12 per cent have plans to increase their spending on the software while only 5 per cent are expected to reduce their budget.
'In the more mature countries, enterprises are looking at improving their alignment between business requirements and IT processes. Increased investment in business process management software would be critical to achieve this objective,' Mr Lim added.
For the emerging countries, IDC expects the proliferation of applications within the on-demand platform to be a major driver for application deployment software investments, he added.
In APEJ, emerging countries like India, Vietnam and China are expected to lead the pack in opportunities as these countries carry with them the highest five-year CAGR at 17 per cent, 15 per cent and 14 per cent respectively.
He noted that the ADS market was poised for good growth in the region over the next five years with the push for cloud based initiatives by the public sector.
'In Singapore, for example, there is expected to be a lot of emphasis on healthcare and education while emerging markets like Vietnam and Thailand will witness SOA adoption in various industries.'
ADS adoption will also be spurred by the need to improve and add on value and services to customers and employees in the telco and banking sectors through web-based applications in both private and public sectors, he added.
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