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AD&D growth rate moderate: IDC Canada

The market may be flat for the next few years in the application development and deployment space (AD&D), but there is potential for growth if relational database management systems (RDBMS) consolidate functionality, according to a recent report issued by a Toronto-based research firm.

In the report entitled Canadian Application Development and Deployment Software Forecast Update, 2003 to 2007, IDC Canada divided AD&D into seven submarkets including Information and Data Management Software, or RDBMS, and Application Design – the largest submarket in the AD&D market.

While the overall growth rate in AD&D appears to be relatively moderate as a whole, areas such as RDBMS might still have growth opportunities, said Warren Shiau, senior analyst, software, IDC Canada.

“Reducing complexity is a key vendor opportunity. Vendors are adding in more and more functionality outside of the database itself, with more AD&D functionality,” he said, giving the example of RDBMS vendors increasing the bundling of product functionality such as BI tool functionality.

Much of this need for bundling is a result of large organizations deferring system upgrades in 2002. While the AD&D market declined slightly in 2002 from 2001, IDC said it expects RDBMS vendors to increase bundling of product functionality that optimizes, extends or simplifies existing RDBMS offerings, Shiau said.

“I think that this shows a progressive movement towards a lot of functionality being consolidated in the sale of the RDBMS,” he explained. He added that the impact of possibly increasing AD&D growth within the RDBMS could be at the expense of other markets.

Still, the research firm isn’t expecting to see a lot of growth within the AD&D market, Shiau said. The report forecasts that the market will grow at a 2.8 per cent compound annual growth rate to $1.7 billion by 2007. Right now, the market sits at about $1.5 billion and will likely remain flat at $1.52 billion for 2003.

Factors affecting the AD&D market include the economy and corporate profits, but adoption rate is another hot issue.

Within AD&D – which encompasses new technology areas such as XML databases and new tools packages – a lot of users don’t want to adopt new tools and technologies at this point, they’d rather stick with the tools they are using, Shiau said.

Overall, while the database market has been depressed for a while, big players in the market, such as Oracle Corp., are doing reasonably well, Shiau said.

It’s a wrong perception that that business is dying off [in databases],” he said. “They’re doing better than most perceive.”

IDC Canada is online at www.idc.ca.

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