The unglamorous middleware market is enjoying a surge thanks to the rise of the digital transformation craze, with spending growing 11.9 per cent in 2017.
That's according to Gartner, which claims worldwide spending on application infrastructure and middleware (AIM) hit $28.5bn last year.
AIM spending is being driven by the shift to digital business models, the market watcher claimed.
"The more companies move toward digital business models, the greater the need for modern application infrastructure to connect data, software, users and hardware in ways that deliver new digital services or products," said Fabrizio Biscotti, research vice president at Gartner.
Although market leaders IBM and Oracle own nearly a third of the market between them, momentum is shifting from market incumbents to challengers, Gartner said.
The small challenger segments are built predominantly around cloud and open-sourced based application integration (iPaaS) offerings, the market watcher explained.
"In iPaaS we find the groundwork being laid for a digital future, as the products in this segment generally are lighter, more agile IT infrastructure suited for the rapidly evolving use cases around digital business," said Bindi Bhullar, research director at Gartner.
"The result is that well-funded, pure-play iPaaS providers, open-source integration tool providers and low-cost integration tools are challenging the dominant position of traditional vendors."
iPaaS sales grew 60 per cent in 2016 before surging a further 72 per cent this year to top $1bn, Gartner said, but are still a small part of the overall market.
The most successful challengers in the AIM market will therefore be those that position their products as complementary to — rather than replacements for — the existing legacy software infrastructure that is common in most large organisations, Biscotti said.
IBM's AIM revenues hit $6.1bn last year, up 2.7 per cent, handing it 21.5 per cent marketshare. Oracle's AIM revenues were almost flat at $3.1bn, with Salesforce, Microsoft and Amazon rounding out the top five.
The AIM market will grow even faster in 2018, after which spending growth will slow each year, reaching around five per cent in 2022, Gartner concluded.
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