www.pwc.com/globalsoftware100 Technology Institute PwC Global 100 Software Leaders Converging forces are building that could re-shape the entire industry About The interviews To learn more In addition to its quantitative findings, this report also includes insights from interviews www.pcw.com/globalsoftware100 with 28 software executives. We thank all of them for their contributions: Adobe Cegid Infosys Newgen Software Shanghai Boke Information Mark Garrett Patrick Bertrand Basab Pradhan Diwakar Nigam Technology CFO CEO Senior Vice President and Managing Director Shen Guokang Head of Global Sales President Advanced Computer Software CollabNet OnMobile Global Vin Murria Jim Ensell Jive Software Mouli Raman Splunk CEO Chief Marketing and Strategy Officer Tony Zingale Managing Director Godfrey Sullivan Chairman and CEO Chairman and CEO AsiaInfo-Linkage Dassault Systèmes Ramco Systems Andy Tiller Bernard Charlès K.K. Ashisuto Virender Aggarwal Talend Vice President, Corporate CEO Tatsuo Otsuka CEO Bertrand Diard Product Marketing President Co-founder and CEO EasyVista Red Hat AVEVA Jamal Labed Kewill Systems Jim Whitehurst Tally Solutions Les Elby Co-founder and CEO Evan Puzey President and CEO Bharat Goenka Vice President, Business Strategy Chief Marketing Officer Co-founder and Managing Director Hitachi, Ltd., Information SAP BMC Software & Telecommunications NetSuite Jonathan Becher Trend Micro Ken Berryman Systems Company Jim McGeever Chief Marketing Officer Mahendra Negi Senior Vice President, Strategy Munehiro Hashimoto COO COO/CFO and Corporate Development Division President, SAS IT Platform Business Neusoft Jim Davis TSIA Management Division Dr. Liu Jiren Senior Vice President and J.B. Wood Chairman and CEO Chief Marketing Officer President and CEO Welcome The global software industry is now in the Meanwhile, the software market as the proportion of revenue they derive midst of an evolutionary change as several continues to broaden—in terms of both from this form of cloud computing. The forces in the market are converging, geography and types of competitors. As data highlight how this delivery model triggering deep and permanent shifts in vendors expand around the world, they is starting to become a key part of the the basic structure of the business. are running into regional competitors foundation of the software business. more attuned to local needs as well Even more dramatic than the numbers, First, vendors are beginning to feel the as emerging competitors from other however, are the comments of more than effects of the software-as-a-service (SaaS) industries that are starting to launch their two dozen leading software industry technology on their business models own software products in the form of executives from around the globe. We and markets. How vendors respond will online applications. thank these executives for their time and be crucial to the future health and even willingness to share their insights on what viability of their companies. Additionally, the competition for key skills is happening and how these trends are and experience has become a global war changing their strategies as well as the Second, the explosion in the number of for talent. Large vendors are expanding to day-to-day operation of their companies. mobile devices, the ubiquity of broadband regions beyond their typical recruitment connectivity and the consumerisation of grounds in search of top-flight engineers, We hope this report gives you a deeper IT are shifting the balance of power in programmers, and executives. Companies understanding of the underlying forces enterprise software purchasing from the are using their checkbooks and stock that are influencing the future of the software vendor to the individual user. market valuations to acquire companies software industry, and that you use this for their technology as well as their knowledge to your advantage. Please These trends are forcing software talented people. contact me or the other practice leaders companies to change nearly everything— in this report if you have questions or from the way they develop products to This edition of the Global 100 Software would like to discuss how we can help your how they price, sell, deliver and service Leaders Report, which we launched organisation during this tumultuous era. them. And many companies are caught in 2010, continues PwC’s tradition of Mark McCaffrey in a conundrum: While they must monitoring and analysing the leading Global Software Leader quickly adapt to this new world, they companies and trends in the industry. still earn most of their revenue from This year, we’ve added unique statistics [email protected] +1 408 817 4199 the old model—traditional enterprise on the number of large companies software licensing. participating in the SaaS market as well May 2013 PwC Global 100 Software Leaders 3 Acknowledgements Software industry associations The software industry is a key source of innovation today for how or whether their customers are deriving real business value nearly all aspects of business and even society. From low-cost from their technology. Far fewer actually have the ability to engage mobile apps to sophisticated enterprise programs to data analytics, with their customers to increase that value. Those companies software adds value, enhances productivity and even improves the that have this ability will also have the potential to achieve higher quality of life for billions of people around the world. growth by more effectively satisfying customer demand. Even more opportunities—as well as challenges—appear today. Solid analysis and insight into these trends, including the As the new SaaS consumption model gains in popularity at the information in this report, are valuable in guiding software expense of the traditional licensing model, vendors must transform vendors, industry associations, governments and enterprises their organisations. A major by-product of SaaS adoption is that through these transitions. The Technology Services Industry software companies’ financial results will align more closely than Association (TSIA) and the French Association of Software before with the value their customers derive from the software. Publishers and Internet Solutions (AFDEL) are pleased to support This next-generation, ‘outcome-driven’ operating model will be PwC in providing a strong tool to analyse IT transformation all game changing. Few on-premise software companies today know over the world. J.B. Wood Jamal Labed President and CEO President TSIA AFDEL US France The Technology Services Industry Association (TSIA) is the world’s leading The French Association of Software Publishers and Internet Solutions, organisation dedicated to advancing the business of technology services. AFDEL, aims to bring together software and Internet companies as a Technology services organisations large and small look to TSIA for world-class community and to be the spokesperson for the digital industry in France. business frameworks, best practices based on real-world results, detailed AFDEL currently has more than 330 members (representing approximately performance benchmarking, exceptional peer networking opportunities and high- €3.5 billion in revenue) throughout France. Members include major profile certification and awards programs. TSIA corporate members represent international groups, SMEs and start-ups. To learn more please visit the world’s top technology companies as well as scores of innovative small and http://www.afdel.fr/. mid-size businesses in four major markets: enterprise IT & telecom, consumer technology, healthcare & healthcare IT, and industrial equipment & technology. 4 PwC Global 100 Software Leaders May 2013 Contents Introduction 7 Global 100 Software Leaders 10 Emphasis on the ‘consumer’ in consumerisation of IT 12 North America 100 15 As SaaS accelerates, so do dilemmas 18 EMEA 100 23 Using data analytics externally and internally 26 Consolidation 28 Emerging Markets 100 29 Globalisation 33 Conclusion 36 Methodology 37 Of further interest 38 PwC can help: A list of local professionals 39 May 2013 PwC Global 100 Software Leaders 5 Introduction The state of the software industry appears • focusing more sharply than ever on as a service, either by subscription or as a “The vision that financial relatively calm. On the surface, that is. what customers, especially individual true pay-as-you-go usage model. Add the investors and clients have The well-known trends—cloud, software- users in enterprises, want; explosion of mobile devices, the ubiquity of as-a-service (SaaS), mobile devices and wireless networks and the consumerisation of the software industry is • collaborating with customers and consumerisation of IT—are making their of IT, and you get further innovation—and partners more than ever; not accurate anymore. The own individual waves for software vendors. confusion—in business models. These industry is changing.” Dive beneath the surface, however, and • rethinking various aspects of their forces are causing deep structural changes, Bernard Charlès you will find a strong undertow created business models, including delivery fundamentally altering how companies do Dassault Systèmes by the combination of all these forces, methods, pricing strategies and sales business. What exactly are software vendors pulling the industry in new directions. It’s compensation options; and selling? How much should it cost? And to a multiplier effect that is redefining how whom should they be selling it? • increasing the differentiation