Some of you know that I’ve decided to track the demise ;-) of the traditional software market on a quarterly basis using IBM’s WebSphere branded revenue as the basis. I use the WebSphere division for no other reason than it’s the part of IBM that I report into. Here are the 1Q07, 4Q06 and 3Q06 posts if you fancy. IBM announced 2Q07 results today.

A few points of interest from 2Q07:

  1. IBM Software grew at 13% (or 9% at constant currency: i.e. if currency exchange rates were fixed to equal their 2Q06 rates)
  2. WebSphere branded middleware grew at a very healthy 28%
  3. IBM’s other Software families grew 12%, 11%, 33% and 21% for Lotus, Rational, Tivoli and Information Management respectively

I stress very healthy because 28% growth is pretty awesome when you’re growing from such a large revenue base, which unfortunately, IBM does not make public. But, if you have access to Gartner or IDC data, you can easily get to a ballpark number of total WebSphere branded revenue.

WebSphere Branded Middleware Quarterly Revenue Growth:

Quarter Y/Y Qtr Growth From:
1Q04 24% Source
2Q04 N/A Source
3Q04 14% Source
4Q04 18% Source
1Q05 11% Source
2Q05 18% Source
3Q05 14% Source
4Q05 4% Source
1Q06 26% Source
2Q06 17% Source
3Q06 30% Source
4Q06 22% Source
1Q07 14% Source
2Q07 28% Source

IBM WebSphere Application Server Results:
Some might reply: “come on Savio, you expect me to believe that in the face of open source competition, the application server business is growing at all? Maybe WebSphere Branded Middleware is growing, but the underlying application servers surely aren’t, right?”

IBM provided WebSphere Application Server’s yearly growth in 2006, so we can compare that figure to the growth of WebSphere branded middleware in the table above:

From pg. 34 of IBM’s 2006 Annual Report :

“Revenue from the WebSphere family of products increased 23.3 percent (22 percent adjusted for currency) and was led by doubledigit growth in WebSphere Application Servers (25.3 percent) and WebSphere Business Integration (22.7 percent) software versus 2005″

Translation: The WebSphere Application Server family revenue growth outpaced the figures that you’ll find in the table above.

Yes, even in the face of open source competition, the WebSphere Application Server business is growing at 2-3x the market. How? We’re helping our customers address their business needs to achieve success. In some customer situations, we help customers achieve success through the use of WAS Community Edition (WAS CE). In other situation we help customers achieve success through the use of the traditional WebSphere Application Server family. The results are pretty clear.