iPaaS market has reached $1 billion for the first time in 2017.
As businesses shift toward digital business models such as cloud computing, the Internet of Things (IoT), analytics, and artificial intelligence, the application infrastructure and middleware (AIM) market is growing, with AIM market revenue reaching $28.5 billion (approx. £21.3 billion) in 2017, an increase of 11.9 percent, Gartner has revealed.
This is driven by current trends such as migration to cloud platforms and services, ever-increasing demand for near-real-time data and analytics, a shift towards an application programming interface (API) economy, IoT and AI deployment.
The American research and advisory firm forecasts faster growth for the AIM industry in 2018, although spending will slow down every year to 5 percent by 2022 with the market shifting from market incumbents to challengers.
Fabrizio Biscotti, Research Vice President at Gartner explained robust demand in the AIM market was down to digitalisation and how organisations build digital initiatives.
Biscotti said: “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.”
With licensed, on-premises application integration suite products, equating to larger segments of the market from established companies such as IBM and Oracle delivering single-digit growth in 2016 and 2017, Gartner expects this trend to continue until 2022.
Small challenger segments within the integration platform as a service (iPaaS) market, built around cloud and open-source-based application integration services will continue double-digit growth despite being a small segment of the AIM market.
The iPaaS market reached $1 billion (approx. £747 million) for the first time in 2017 after the industry grew by 72 percent, surpassing the previous 60 percent growth in 2016, making it one of the fastest-growing software segments.
Bindi Bhullar, Research Director at Gartner highlighted that smaller iPaaS competitors were challenging the dominant positions traditional vendors once had in the market.
Bhullar added: “There is still a lot of room for further consolidation, with more than half the AIM market held by vendors outside the top five. This “others” segment is enjoying double-digit growth, which is likely to encourage acquisitions from big players losing market share to challengers.”