PwC Global 100 Software Leaders

globalsoftware100

Technology Institute

PwC Global 100 Software Leaders

Digital intelligence conquers the world below and the cloud above

Executive summary

The new PwC Global 100 Software Leaders ranking reveals who is taking advantage of both the evolutionary and revolutionary changes afoot in technology. While the cloud continues to underpin massive change, other trends are building on its capabilities to create opportunities in digital innovation, industrial capabilities and convergence within vertical markets. This initial article provides an overview of the trends impacting the global leaders and others. Future articles will examine issues impacting the fastest growing cloud-based companies and the larger software companies in emerging markets.

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PwC Global 100 Software Leaders

Introduction

We are in an era of innovation that seems to have no precedent. Concurrent advances in software development, mobility, connectivity and analytics have combined to create a landscape in which ideas arise, and flourish quickly. The underlying foundation to this innovation is software--smarter, leaner and better software.

The new edition of the PwC Global 100 Software Leaders ranking reveals the vendors who are taking advantage of both the evolutionary and revolutionary changes afoot in technology. While the cloud continues to underpin massive change, other trends are building on its capabilities to create opportunities in digital innovation, industrial capabilities and convergence within vertical markets.

Customers are seeing rampant changes as well. Enterprises have the opportunity to take advantage of various new deployment options, not only from startups, but also from established vendors. The spectrum of options encompasses everything from private to public cloud, from onsite to offsite hosting and from perpetual licenses to month-tomonth subscriptions.

The partnership landscape also percolates. Consider General Motors partnering with Lyft for what might be driverless cars, or Roche partnering with Qualcomm to improve remote monitoring of patients with chronic diseases. For companies seeking to use software-- either their own or someone else's-- for a competitive advantage, the choices may be overwhelming.

The spoils go to anyone whose code represents an improvement. As a result, startup vendors are challenging established software companies, sometimes with significantly better ideas. The PwC Global 100 Software Leaders list contains examples of this. Cloudbased Workday, which appears on the Global 100 for the first time at #72, is challenging existing companies in the human-resources space. Splunk, a startup focused on big-data analytics debuting at #100, is challenging established firms in similar areas.

This is the fourth edition of PwC's Global 100 Software Leaders ranking since 2010. The current edition continues our tradition of monitoring and analysing the leading companies and trends in the industry. Our goal is to help our clients understand both the obvious and the underlying forces influencing the software industry.

Thanks to software, we are not only living in a time of unprecedented innovation, but also one of unprecedented opportunity and uncertainty.

Our research yields four key findings:

? The software industry is experiencing a rapid expansion of its total addressable market (TAM) and a high level of turbulence.

? Cloud adoption is creating new software-as-a-service (SaaS)-based business models.

? The move to SaaS significantly impacts the revenue of traditional vendors.

? Connected devices and artificial intelligence (AI) are creating new business opportunities.

PwC

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Global 100 Software Leaders

Analysing the changes between the current Global 100 Software Leaders and the previous ranking, published in 2014, indicates just how dynamic the market is. Both lists were compiled for PwC by International Data Corp. (IDC). (For more information on how the lists are compiled, see the Methodology section on page 20.) Fourteen companies fell off the current list, which means 14 are new. A churn of 28 seems like quite a bit in just two years. Four of the 14 companies that fell off the list were acquired, and one (Compuware) split into two companies. Actually, it's fairly easy to fall off the list. Of the bottom 12 in the previous list, 10 are gone.

Growth and innovation continue apace

The Global 100 Software Leaders' revenues grew from US$247.5 billion in 2012 to US$$272.2 billion in 2014, a 10% increase. Meanwhile, the rest of the industry grew 13% amidst a relatively weak global economy.

(US$ Billion) $400

$300

$200

$100

$100.1B $86.0B

$161.5B

$113.1B $100.5B $171.7B

Growth rate

13% 16.9% 6.3%

0

2012

2014

Top 10 software companies

#11-100

Rest of the software industry

Source: PwC's Global 100 Software Leaders report with data provided by IDC.

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PwC Global 100 Software Leaders

"Several companies couldn't keep up their growth and as a result fell off the list," says Mark McCaffrey, PwC Global Software Leader, "There are others that are large enough to survive because they have the cash and the wherewithal to acquire cloud companies."

Many companies show staying power: Microsoft remains at #1, while Oracle and IBM have swapped as #2 and #3, with Oracle edging out IBM. Other companies in the top 20 from the previous list have moved up: ? Symantec, up one position to #5;

? EMC, up two at #6;

? Salesforce, up four to #9

? Intuit, up six to #10.

A couple of big jumps are worth mentioning: Google leaped from #52 to #20, while Dell jumped from #64 to #36. (See table on pages 6-9)

Moving in the other direction in the top 20: ? HP, down one position at #8;

? CA Technologies, down two at #12;

? Adobe, down two at #11.

"Many factors affect downward movement," says Raman Chitkara, PwC Global Technology Leader. "These include the ongoing shift from a licensing to a SaaS business model, competition from startups and the challenge of digitisation. In some cases, a lack of agility when it comes to executing organisational change could be the issue."

Some companies are clearly taking advantage of the SaaS revolution. The current Global 100 Software Leaders also ranks SaaS and platform-as-aservice (PaaS) revenue for the top 50 companies, and the percentage each segment comprises of overall software revenue. The companies with the biggest jump in the combined percentage represent a small group that is on the cutting edge.

Among the top 20 companies the list of SaaS standouts includes: ? Intuit (#10) with 46% of revenues

from SaaS;

? Adobe (#11) with 23% of revenues;

? Cisco Systems (#14) with 35%;

? Citrix (#19) with 27%.

These are indications of companies that understand the changes underway. (See table on pages 12-13)

Some companies are clearly taking advantage of the SaaS revolution.

PwC

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Global 100

Rank Company

1 Microsoft 2 Oracle 3 IBM 4 SAP 5 Symantec 6 EMC 7 VMware 8 Hewlett Packard 9 10 Intuit 11 Adobe 12 CA Technologies 13 SAS* 14 Cisco Systems 15 Dassault Syst?mes 16 Siemens 17 Fujitsu 18 Autodesk 19 Citrix 20 Google 21 Hitachi 22 Apple 23 Infor 24 Synopsys 25 Intel

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PwC Global 100 Software Leaders

Country HQ

USA USA USA Germany USA USA USA USA USA USA USA USA USA USA France Germany Japan USA USA USA Japan USA USA USA USA

2014 Software revenue (US$M)

$62,014 $29,881 $29,286 $18,777 $6,138 $5,844 $5,520 $5,082 $4,820 $4,324 $4,061 $4,053 $2,884 $2,836 $2,695 $2,613 $2,527 $2,413 $2,376 $2,273 $2,159 $2,110 $2,099 $1,934 $1,899

2014 Total revenue (US$M)

$93,456 $38,828 $92,793 $23,289 $6,615 $24,439 $6,035 $110,577 $5,274 $4,573 $4,183.5 $4,410 $3,084 $47,823 $3,038 $95,542 $43,526 $2,486 $3,143 $66,001 $91,246 $199,800 $2,815 $2,100 $55,870

Software revenue as % of total

66.4% 77.0% 31.6% 80.6% 92.8% 23.9% 91.5% 4.6% 91.4% 94.6% 97.1% 91.9% 93.5% 5.9% 88.7% 2.7% 5.8% 97.1% 75.6% 3.4% 2.4% 1.1% 74.6% 92.1% 3.4%

*Denotes a privately held company

Rank Company

26 BMC 27 Sage 28 ADP 29 Wolters Kluwer 30 Red Hat 31 OpenText 32 SunGard* 33 NEC 34 Cadence Design Systems 35 Hexagon 36 Dell 37 Teradata 38 NetApp 39 NCR 40 Epic Systems* 41 Constellation Software 42 McKesson 43 Mentor Graphics 44 PTC 45 Trend Micro 46 Nuance Communications 47 DATEV* 48 Esri* 49 Cerner 50 ANSYS

Country HQ

2014 Software revenue (US$M)

USA

$1,878

UK

$1,724

USA

$1,660

The Netherlands

$1,539

USA

$1,517

Canada

$1,496

USA

$1,464

Japan

$1,441

USA

$1,435

UK

$1,413

USA

$1,395

USA

$1,221

USA

$1,169

USA

$1,157

USA

$1,140

Canada

$1,134

USA

$1,123

USA

$1,076

USA

$1,073

Japan

$1,035

USA

$1,009

Germany

$975

USA

$960

USA USA

$946 $917

2014 Total revenue (US$M)

$2,087 $1,762 $10,604 $4,880 $1,741 $1,858 $2,808 $28,151 $1,579 $3,497 $58,500 $2,732 $6,252 $6,591 $1,770 $1,230 $168,711 $1,231 $1,358 $1,090 $1,927 $1,119 $1,129 $3,402 $936

Software revenue as % of total

90.0% 97.8% 15.7% 31.5% 87.1% 80.5% 52.1% 5.1% 90.9% 40.4% 2.4% 44.7% 18.7% 17.6% 64.4% 92.2% 0.7% 87.4% 79.1% 95.0% 52.3% 87.1% 85.0% 27.8% 98.0%

*Denotes a privately held company

PwC

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Rank Company

51 Informatica

52 TIBCO*

53 Software AG

54 Optum*

55 Schneider Electric

56 Fiserv

57 Avaya

58 Kronos*

59 The Attachmate Group*

60 GE Healthcare

61 Epicor Software

62 Verint Systems

63 Concur Technologies

64 athenahealth

65 Kaspersky Lab*

66 Wincor Nixdorf

67 FICO

68 FIS

69 Misys*

70 JDA Software*

71 SWIFT

72 Workday

73

Genesys Telecommunications Laboratories*

74 TOTVS

75 NICE SYSTEMS

Country HQ

USA USA Germany USA France USA USA USA USA UK USA USA USA USA Russia Germany USA USA UK USA Belgium USA

USA

Brazil Israel

2014 Software revenue (US$M)

$914 $847 $843 $819 $804 $781 $766 $762 $733 $732 $731 $725 $724 $711 $695 $666 $643 $633 $611 $605 $602 $592

$587

$584 $576

2014 Total revenue (US$M)

$1,048 $1,016 $1,138 $47,746 $33,252 $5,066 $4,319 $1,054 $872 $18,300 $994 $1,110 $732 $753 $711 $3,279 $794 $6,400 $896 $1,009 $792 $760

$850

$752 $1,012

Software revenue as % of total

87.2% 83.4% 74.1% 1.7% 2.4% 15.4% 17.7% 72.3% 84.1% 4.0% 73.5% 65.3% 99.0% 94.5% 97.7% 20.3% 81.0% 9.9% 68.2% 60.0% 76.0% 77.9%

69.0%

77.7% 56.9%

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PwC Global 100 Software Leaders

*Denotes a privately held company

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