Software in Asia-Pacific

Industry Profile

Reference Code: 0200-0381 Publication date: December 2008

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ABOUT DATAMONITOR
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EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
Market Value The Asia-Pacific software market grew by 7.4% in 2008 to reach a value of $82.9 billion. Market Value Forecast In 2013, the Asia-Pacific software market is forecast to have a value of $139.6 billion, an increase of 68.4% since 2008. Market Segmentation I Network and database management segment accounts for 23.1% of the Asia-Pacific software market's value. Market Segmentation II China accounts for 42% of the Asia-Pacific software market's value.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 3

CONTENTS

TABLE OF CONTENTS

EXECUTIVE SUMMARY CHAPTER 1

1.1 1.2 1.3

3 7
7 7 8

Market Overview

Market Definition Research Highlights Market Analysis

CHAPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6

6.1 6.2 6.3 6.4

Market Value Market Segmentation I Market Segmentation II Competitive Landscape Leading Companies

9 10 11 12 15
15 18 23 26

Microsoft Corporation International Business Machines Corporation Oracle Corporation Hewlett-Packard Company

CHAPTER 7
7.1

Market Forecasts

31
31

Market Value Forecast

Asia-Pacific - Software Datamonitor (Published December 2008) Page 4

CONTENTS

CHAPTER 8
8.1 8.2 8.3 Methodology

Appendix

32
32 33 33

Industry Associations Related Datamonitor Research

Asia-Pacific - Software Datamonitor (Published December 2008) Page 5

CONTENTS

LIST OF TABLES
Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Asia-Pacific Software Market Value: $ billion, 2004-2008 ...................................9 Asia-Pacific Software Market Segmentation I: % Share, by Value, 2008 ..........10 Asia-Pacific Software Market Segmentation II: % Share, by Value, 2008 .........11 Key Facts: Microsoft Corporation......................................................................15 Key Financials: Microsoft Corporation ..............................................................17 Key Facts: International Business Machines Corporation .................................18 Key Financials: International Business Machines Corporation..........................22 Key Facts: Oracle Corporation..........................................................................23 Key Financials: Oracle Corporation ..................................................................25 Key Facts: Hewlett-Packard Company .............................................................26 Key Financials: Hewlett-Packard Company ......................................................30 Asia-Pacific Software Market Value Forecast: $ billion, 2008-2013 ..................31

Asia-Pacific - Software Datamonitor (Published December 2008) Page 6

MARKET OVERVIEW

CHAPTER 1

MARKET OVERVIEW

1.1

Market Definition
The computer software market consists of systems and application software. Systems software comprises operating systems, network and database management, development tools and programming languages, and other systems software. Application software comprises general business productivity and home use applications, cross-industry and vertical market applications, and utilities and other application software. Market value figures are assessed at manufacturer selling price (MSP), based on revenues from software sales and licenses. Any currency conversions used in the creation of this report have been calculated using constant 2007 annual average exchange rates. For the purpose of this report the Americas comprises Brazil, Canada, Mexico, and the US. Europe comprises Belgium, the Czech Republic, Denmark, France, Germany, Hungary, Italy, Netherlands, Norway, Poland, Russia, Spain, Sweden and the UK. Asia-Pacific comprises Australia, China, Japan, India, Singapore, South Korea and Taiwan. The global figure comprises the Americas, Asia-Pacific and Europe.

1.2

Research Highlights
The Asia-Pacific software market generated total revenues of $82.9 billion in 2008, representing a compound annual growth rate (CAGR) of 10.3% for the period spanning 2004-2008. Network and Database management sales proved the most lucrative for the AsiaPacific Software market in 2008, generating total revenues of $19.2 billion, equivalent to 23.1% of the market's overall value. The performance of the market is forecast to accelerate, with an anticipated CAGR of 11% for the five-year period 2008-2013, which is expected to drive the market to a value of $139.6 billion by the end of 2013.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 7

MARKET OVERVIEW

1.3

Market Analysis
The Asia-Pacific software market generated total revenues of $82.9 billion in 2008, representing a compound annual growth rate (CAGR) of 10.3% for the period spanning 2004-2008. In comparison, the Chinese and Japanese markets grew with CAGRs of 10.4% and 5.8%, respectively, over the same period, to reach respective values of $34.8 billion and $20.5 billion in 2008. Network and Database management sales proved the most lucrative for the AsiaPacific Software market in 2008, generating total revenues of $19.2 billion, equivalent to 23.1% of the market's overall value. In comparison, sales of General business productivity and home use applications generated revenues of $17.1 billion in 2008, equating to 20.6% of the market's aggregate revenues. The performance of the market is forecast to accelerate, with an anticipated CAGR of 11% for the five-year period 2008-2013, which is expected to drive the market to a value of $139.6 billion by the end of 2013. Comparatively, the Chinese and Japanese markets will grow with CAGRs of 13.4% and 5.4%, respectively, over the same period, to reach respective values of $65.3 billion and $26.6 billion in 2013.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 8

MARKET VALUE

CHAPTER 2

MARKET VALUE

The Asia-Pacific software market grew by 7.4% in 2008 to reach a value of $82.9 billion. The compound annual growth rate of the market in the period 2004-2008 was 10.3%. Table 1: Year 2004 2005 2006 2007 2008 (e) CAGR, 2004-2008:
Source: Datamonitor

Asia-Pacific Software Market Value: $ billion, 2004-2008 $ billion 56.0 63.3 70.0 77.3 82.9 % Growth

12.90% 10.60% 10.40% 7.40% 10.3%

DATAMONITOR

Figure 1:

Asia-Pacific Software Market Value: $ billion, 2004-2008

$ billion 90 80 70 60 50 40 30 20 10 0 2004 2005 2006 $ billion

% Growth 14.0% 12.0% 10.0% % Growth 8.0% 6.0% 4.0% 2.0% 0.0% 2007 2008

Source: Datamonitor

DATAMONITOR

Asia-Pacific - Software Datamonitor (Published December 2008) Page 9

MARKET SEGMENTATION I

CHAPTER 3

MARKET SEGMENTATION I

Network and database management segment accounts for 23.1% of the Asia-Pacific software market's value. General business productivity and home use applications segment accounts for a further 20.6% of the market's revenue. Table 2: Asia-Pacific Software Market Segmentation I: % Share, by Value, 2008 % Share 23.10% 20.60% 18.70% 18.10% 8.40% 6.80% 4.30% 100.0%
DATAMONITOR

Category Network and Database management General business productivity and home use applications Operating system Cross-industry and vertical application Other application software Development tools and programming languages Other system software Total
Source: Datamonitor

Figure 2:

Asia-Pacific Software Market Segmentation I: % Share, by Value, 2008

Other system softw are 4.3%

Development tools and programming languages Other application 6.8% softw are 8.4%

Netw ork and Database management 23.1%

Cross-industry and vertical application 18.1% Operating system 18.7%

Source: Datamonitor

General business productivity and home use applications 20.6%

DATAMONITOR

Asia-Pacific - Software Datamonitor (Published December 2008) Page 10

MARKET SEGMENTATION II

CHAPTER 4

MARKET SEGMENTATION II

China accounts for 42% of the Asia-Pacific software market's value. In comparison, Japan accounts for a further 24.7% of the market's revenue. Table 3: Asia-Pacific Software Market Segmentation II: % Share, by Value, 2008 Geography China Japan India Rest of Asia-Pacific South Korea Total
Source: Datamonitor

% Share 42.00% 24.70% 13.50% 12.70% 7.20% 100.0%

DATAMONITOR

Figure 3:

Asia-Pacific Software Market Segmentation II: % Share, by Value, 2008

South Korea 7.2% Rest of AsiaPacific 12.7% China 42% India 13.5%

Japan 24.7%

Source: Datamonitor

DATAMONITOR

Asia-Pacific - Software Datamonitor (Published December 2008) Page 11

COMPETITIVE LANDSCAPE

CHAPTER 5

COMPETITIVE LANDSCAPE

The software market has many buyers, in all areas of business. Skilled employees and computer hardware are a key input, and the low capital requirements mean that market entry is eased. However, newcomers must choose their market segment carefully, as certain areas have very strong incumbents (e.g. Microsoft in the PC operating system segment). Healthy market growth eases rivalry. However, alternative business models such as open source and web-based applications are a potential threat to players in this market. This market will be analyzed taking market players as software manufacturers that generate revenue from license agreements. Buyers that utilize software are numerous industries including banking and financial services, manufacturing, telecommunications and technology, logistics etc. Software publishers help manufacturers and retailers with supply chain management, as with the application of RFID. Software is also designed to centralize all data and processes of businesses. Business buyers are reliant on players as software is often industry specific and thus switching costs are high. Despite this switching costs may be lowered by errors and the reliability and quality of software. The complex nature of products means that they can occasionally contain defects. However buyers are often large players (although software solutions are required by any size business) which provides them with strong bargaining power. This issue has been exacerbated in recent years through the consolidation of buyers, particularly in industries such as telecoms. Switching costs are lower for individual buyers, particularly when purchasing computer games. Although there is loyalty to games and consoles, this does not extend to the software companies themselves. Despite their size, buyers' dependence on software products means that overall buyer power is weak. The software market requires various inputs including employees with specific knowhow, hardware devices and software tools. Success in this market requires skilled developers/programmers who are the key, strategic input within this market. Market players rely on the continued service of highly qualified and usually generously paid employees. Inputs such as hardware components are often purchased from sole suppliers, who are often large companies offering differentiated products, resulting in significant supplier power. The likelihood of supplier forward integration is rare, as software production entails a highly complicated process with large amounts of proprietary knowledge, which directly weakens supplier power. Supplier power in this market is strong overall.

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COMPETITIVE LANDSCAPE
Software development is labor intensive, since ultimately it depends on highly skilled software architects and coders. On the other hand, capital requirements are relatively low. Furthermore, access to distribution channels has been made easier in recent years through the development and uptake by end-users of broadband Internet access. This allows software to be purchased, delivered, and updated without the need for physical media. Although major players such as Microsoft have been embroiled in anti-trust lawsuits in Europe, there are few specific regulatory requirements for software companies. In a market where new products - and new kinds of products are frequently launched, R&D investment is important. The position of incumbents may be strengthened by their knowledge of their customers' business needs and their ownership of key intellectual property, and potentially high switching costs for buyers in certain sectors: consider the difficulties faced by a newcomer challenging Microsoft in the PC operating system or word processor / spreadsheet segments, for example. Overall the market is growing, providing opportunities for new entrants. Despite the competitive nature of the market there are also growth opportunities in the widely untapped mid market. Many companies such as SAP are now starting to develop strategies for targeting this sector. Overall, the likelihood of new entrants is moderate. Substitutes in this market are open source software products. Rather than fund their business on big-ticket license contracts, open source companies such as Red Hat receive revenues from services and maintenance. Open source software is a beneficial alternative for many end users. This is because most of it allows users to redistribute the software and adapt it themselves, and it is often a lower cost alternative. Distributors of open source software are relatively small in comparison to traditional market players. Microsoft insists the open source business model is anti-competitive, and will cause traditional players such as themselves to lose revenue. Companies like Google are another significant threat to the conventional software market. The company generates most of its revenue from advertisements next to search results and on third-party sites. Its move into the web-based application market, with services such as Google Apps Premiere Edition could be a threat to the Microsoft desktop package, which occupies a strong position in the market. However, the substitutes do not offer the fully suitable product and time and knowledge must be used in order to tailor the open source software to specific needs of the companies. Overall the threat of substitutes is weak.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 13

COMPETITIVE LANDSCAPE
Software companies may dominate in particular areas of software, for example Oracle's expertise is middleware, although the largest (e.g. Microsoft, IBM) will offer a broad portfolio of products. Some have significant hardware businesses. For example, IBM makes mainframe computers, while Apple offers computers and consumer electronics. Diversification tends to decrease rivalry, as it defends revenues from the vagaries of any particular market segment. Overall, the market is growing strongly which often allows software companies to gain market share without stealing competitors', although this depends on the segment software companies specialize in. Enterprise resource planning (ERP) has seen slower growth and companies are attempting to provide centralized operations for businesses as a way to increase revenues. The rise of converged systems in application software is also increasing rivalry in the software market. For example, IP phones can now be linked to business applications and processes. In contrast, CRM development is growing rapidly, which has provided numerous benefits for companies targeting this sector. Advances in technology mean that products are continually being introduced to the market, enhancing rivalry. Microsoft is a dominant force in the market particularly in desktop software and others struggle to gain market share from this company. Overall rivalry is moderate.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 14

LEADING COMPANIES

CHAPTER 6

LEADING COMPANIES

6.1

Microsoft Corporation
Table 4: Key Facts: Microsoft Corporation 1 Microsoft Way,Redmond,Washington 98052 6399,USA 1 800 642 7676 1 425 936 7329 www.microsoft.com June MSFT NASDAQ National Market
DATAMONITOR

Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Source: Company Website

Microsoft Corporation (Microsoft) is one of the largest IT companies in the world engaged in developing, manufacturing, licensing, and supporting software products. Its software products consist of operating systems, server applications, information worker productivity applications, business solution applications, high-performance computing applications, and software development tools. The company mainly operates in the US. Microsoft divides its business into five segments: Microsoft business, client, server and tools, entertainment and devices, and online services business. Microsoft's business division consists of Microsoft Office system and Microsoft Dynamics business solutions. Microsoft Office system products are designed to increase personal, team, and organization productivity through a range of programs, services, and software solutions. Microsoft Dynamics products provide business solutions for financial management, customer relationship management, supply chain management, and analytics applications for small and mid-size businesses, large organizations, and divisions of global enterprises. The client segment provides technical architecture, engineering and product delivery for the Windows operating system family, and maintains relationships with personal computer manufacturers, including multinational and regional original equipment manufacturers (OEMs). It also undertakes the delivery of Windows products to individual and commercial clients. This segment covers products like Windows XP Professional and Home, Media Center Edition, Tablet PC Edition, and other standard Windows operating systems.

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LEADING COMPANIES
The company released Windows Vista, the most recent version of the Windows operating system, in FY2007. Windows Vista includes advances in security, digital media, user interfaces, and other areas that enhance the user and developer experience. Server and tools segment develops and markets software server products, services, and solutions. Windows Server-based products are integrated server infrastructure and middleware software designed to support software applications and tools built on the Windows Server operating system. Windows Server-based products include the server platform including targeted segment solutions, database, storage, management and operations, service-oriented architecture platform, and security and identity software. The segment also builds standalone and software development lifecycle tools for software architects, developers, testers, and project managers. The company offers a broad range of consulting services and provides product support services and industry solutions. The company also provides training and certification to developers and information technology professionals about its Server and Tools and Client platform products. Major releases from Server and Tools in FY2008 included Windows Server 2008 and Visual Studio 2008. In FY2009, the company is planning to release Microsoft SQL Server 2008 which will deliver advances in database scalability, performance, security, and policy-based management. The entertainment and devices division (EDD) is responsible for developing, producing, and marketing the Xbox video game system, including consoles and accessories, third-party games, games published under the Microsoft brand, and Xbox Live operations, as well as research, sales, and support of those products. In addition to Xbox, the company offers the Zune digital music and entertainment device; PC software games; online games; mediaroom, Internet protocol television software; mobile and embedded device platforms, Surface computing platform; and other devices. EDD also leads the development efforts of the company's line of consumer software and hardware products including application software for Macintosh computers and Microsoft PC hardware products, and is responsible for all retail sales and marketing for Microsoft Office and the Windows operating systems. The online services business (OSB) consists of an on-line advertising platform with offerings for both publishers and advertisers, personal communications services such as email and instant messaging, online information offerings such as Live Search, and the MSN portals and channels around the world.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 16

LEADING COMPANIES
During FY2008, the company launched new releases of Windows Live Search, the Windows Live suite of applications and services, and updated MSN Video Service. In addition, Microsoft launched a new release of adCenter, the company's proprietary advertising platform. Key Metrics Table 5:
Metric Revenues Net Income Profit Margin Total Assets Total Liabilities Employees
Source: Company Filings

Key Financials: Microsoft Corporation

2004 36,835.0 8,168.0 22.2% 94,368.0 79,399.0 57,000 2005 39,788.0 12,254.0 30.8% 70,815.0 22,700.0 61,000 2006 48,282.0 12,599.0 26.1% 69,597.0 50,696.0 71,000 2007 51,122.0 14,065.0 27.5% 63,171.0 32,074.0 79,000 2008 60,420.0 17,681.0 29.3% 72,793.0 36,507.0 91,000

DATAMONITOR

Figure 4:

Revenues & Profitability: Microsoft Corporation

Revenues Net Income Profit Margin 35.0% Profit Margin (%) 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2004 2005 2006 Year 2007 2008

70,000 60,000 US$ Millions 50,000 40,000 30,000 20,000 10,000 0

Source: Company Filings

DATAMONITOR

Asia-Pacific - Software Datamonitor (Published December 2008) Page 17

LEADING COMPANIES
6.2 International Business Machines Corporation
Table 6: Key Facts: International Business Machines Corporation 1 New Orchard Road,Armonk,New York 10504,USA 1 914 499 1900 1 914 765 7382 www.ibm.com December IBM New York
DATAMONITOR

Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Source: Company Website

International Business Machines Corporation (IBM) is an information technology company. IBM provides business, technology and consulting services. The company develops and manufactures products and services related to advanced information technology, including technology services, software, storage systems and microelectronics. The company's business operations offer a range of services and technologies which includes, hardware, software, financing, research and chip technologies. The company operates in over 170 countries across North America, Latin America, Europe, Middle East, Africa and Asia Pacific. IBM operates through five operating segments: global technology services, global business services, systems and technology group, software, and global financing. IBM's global technology services and global business services segments are organized as one group global services. The global services segment provides insight and solutions including IBM software and hardware and other suppliers' products to various clients. Contracts for IBM services, called as signings, range from less than one year to over 10 years. Global services signings are the management's initial estimate of the value of a client's commitment under a global services contract. Signings are used by the management to assess period performance of global services management. Signings include strategic outsourcing (SO), business transformation outsourcing (BTO), integrated technology services (ITS) and global business services (GBS) contracts. The global technology services segment comprises infrastructure services and business process services. The segment's services include strategic outsourcing services, business transformation outsourcing, integrated technology services and maintenance.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 18

LEADING COMPANIES
The strategic outsourcing services offer IT services to reduce costs and improve productivity through the outsourcing of processes and operations. The business transformation outsourcing services comprise a range of offerings from standardized processing platforms and business process outsourcing of the client's business processes, applications and infrastructure. The integrated technology services assist clients to access, manage and support their technology infrastructures through the combination of technicians, IBM's expertise and software. The maintenance services include various support services from product maintenance through solution support to maintain and improve the availability of clients' IT infrastructure. The global services segment primarily provides professional services and applications outsourcing services. The company leverages its industry and businessprocess expertise in these services. The segment's offerings include consulting and systems integration, and application management services, among others. The consulting and systems integration services offering comprise consulting services in the areas of client-relationship management, financial management, human-capital management, business strategy and change, and supply-chain management. The application management services include application development, management, maintenance and support services for packaged software, as well as custom and legacy applications. The systems and technology group provides IBM's clients with business solutions requiring advanced computing power and storage capabilities. Approximately 55% of the systems and technology group's server and storage sales transactions are through business partners; approximately 45% are direct to end-user clients, more than 40% are through the internet at ibm.com. The group also provides semiconductor technology and products, packaging solutions and engineering technology services to clients and for IBM's own advanced technology needs. The company deploys its hardware services to support services solutions. The systems and technology group sells the equipment that it purchases from global financing to external clients. The segment offerings include systems, storage products, microelectronics products, engineering and technology services, and retail store solutions. The systems business includes IBM systems using IBM operating systems (System z, System I, System x and BladeCenter) and the Microsoft Windows operating system. All servers can also run Linux, a key open source operating system.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 19

LEADING COMPANIES
The segment's storage solutions include information infrastructure products and solutions for information retention and archiving, availability and virtualization, and security and compliance. The storage solutions portfolio comprises a range of disk and tape storage systems and software. The microelectronics business provides semiconductor design and manufacturing for use in IBM systems and for sale to external clients. The engineering and technology services include system and component design services (Blue Gene - supercomputer systems), outsourcing of clients' design teams and technology, and manufacturing consulting services. The retail store solutions business offers point-of-sale (POS) retail systems and solutions to connect POS with other store systems. The company divested its printing systems business to Ricoh in June 2007. The software segment consists of middleware and operating systems software. The middleware software enables clients to integrate systems, applications and processes across a standard software platform. IBM middleware is designed to open standards, which allow the integration of unrelated client applications that may have been built internally provided by package software vendors and system integrators. In addition, software includes product lifecycle management (PLM) software, which primarily serves the industrial sector. The segment's middleware software is classified into key branded middleware and other middleware. Key branded middleware includes information management software, Lotus software, Rational software, Tivoli software and WebSphere software. It also offers PLM and operating systems software. The information management software includes advanced database, content management and information integration software for integration, management and to gain value from business information. Lotus is a collaboration, messaging and social networking software that enables businesses to communicate, collaborate and increase productivity. Rational is a software tools that help clients manage their software development processes and capabilities. Tivoli offers infrastructure management including security and storage management which helps organizations to manage their IT infrastructure to effectively deliver IT services. The WebSphere software enables the management of a wide variety of business processes using open standards to interconnect applications, data and operating systems. The global financing segment comprises three lines of business: client financing, commercial financing and remarketing.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 20

LEADING COMPANIES
Client financing provides lease and loan financing to end users and internal clients for terms generally between two and seven years. Internal financing is predominantly in support of global services' long-term client services contracts. Global financing also factors a selected portion of the company's accounts receivable, primarily for cash management purposes. All internal financing arrangements are at arm's-length rates and are based upon market conditions. Commercial financing provides short-term inventory and accounts receivable financing to dealers and re-marketers of IT products. Remarketing sells and leases used equipment to new and existing clients both externally and internally. This equipment is sourced from the conclusion of lease transactions. Externally re-marketed equipment revenue represents sales and leases to clients and resellers. Internally re-marketed equipment revenue represents used equipment that is sold and leased internally to the systems and technology group and global services segments. The primary use of funds in global financing is to originate client and commercial financing assets. Client financing assets for end users consist primarily of IBM hardware, software and services, as well as non-IBM equipment, software and services to meet clients' total solutions requirements. Client financing assets are primarily sales type, direct financing, operating leases for equipment, and loans for hardware, software and services with terms generally for two to seven years. Global Financing's client loans are primarily for software and services, and are unsecured. These loans are subject to credit analysis in order to mitigate the associated risk. Unsecured loan agreements include credit protective language, security deposit advances and dollar limits on how much can be financed in order to minimize credit risk. Commercial financing receivables arise primarily from inventory and accounts receivable financing for dealers and re-marketers of IBM and non-IBM products. Payment terms for inventory financing and accounts receivable financing generally range from 30 to 90 days. These short-term receivables are primarily unsecured and are also subject to additional credit actions in order to mitigate the associated risk.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 21

LEADING COMPANIES
Key Metrics Table 7:
Metric Revenues Net Income Profit Margin Total Assets Total Liabilities
Source: Company Filings

Key Financials: International Business Machines Corporation

2003 89,131.0 7,583.0 8.5% 104,457.0 76,593.0 2004 2005 2006 2007 96,293.0 91,134.0 91,424.0 98,786.0 7,479.0 7,934.0 9,492.0 10,418.0 7.8% 8.7% 10.4% 10.5% 109,183.0 105,748.0 103,234.0 120,431.0 79,436.0 72,650.0 74,728.0 91,962.0
DATAMONITOR

Figure 5:

Revenues & Profitability: International Business Machines Corporation

Revenues Net Income Profit Margin 12.0% Profit Margin (%)
Page 22

120,000 100,000 US$ Millions 80,000 60,000 40,000 20,000 0 2003 2004 2005 Year 2006 2007

10.0% 8.0% 6.0% 4.0% 2.0% 0.0%

Source: Company Filings

DATAMONITOR

Asia-Pacific - Software Datamonitor (Published December 2008)

LEADING COMPANIES
6.3 Oracle Corporation
Table 8: Key Facts: Oracle Corporation 500 Oracle Parkway,Redwood Shores,California 94065,USA 1 650 506 7000 1 650 506 7200 www.oracle.com May ORCL New York
DATAMONITOR

Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Source: Company Website

Oracle provides a range of products including database, application software and middleware software suites and services supporting standard technology platforms and application implementation related training. The company operates through five business divisions: new software licenses, software license updates and product support, consulting, on demand, and education. Oracle markets its products through a network of subsidiary sales and service organizations located worldwide. Oracle's globally established subsidiaries license and sell its products in the respective local markets. In foreign markets where it does not have direct sales subsidiary, Oracle supplements its direct product distribution with indirect sales channels which comprise members of the Oracle PartnerNetwork. Partnernetwork is the global network of companies, independent software vendors, system integrators, resellers and distribution alliances, who provide the clients with independent applications supported by the company's software. The company has operations in the US, UK, France, Germany, Japan, and other foreign countries. New software licenses comprise the licensing of that covers Oracle Database and Oracle Fusion software. Oracle's relational database enables retrieval of all forms of data including structured database and middleware software Middleware as well as applications secure storage, manipulation and data in business applications, XML

data, analytics data, spatial data and other unstructured data such as documents, spreadsheets and images. Oracle Fusion Middleware is a broad product family that enables development, deployment and integration of business applications and automation of business processes. Oracle's application software enables efficient management of all core business functions including customer relationship management (CRM), enterprise performance management (EPM), enterprise resource planning (ERP) and industryspecific applications.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 23

LEADING COMPANIES
Software license updates and product support provide rights to unspecified software product upgrades, maintenance releases and patches released during the term of the support period. Product support includes internet and telephone access to technical support personnel located in global support centers, as well as internet access to technical content and Oracle's unbreakable Linux support to the customers using Linux platforms. The company's services segment is further classified in to three sub segments: consulting, on demand and education. Consulting services caters to the customer requirements in deploying the company's applications and technology products. Consulting services include business strategy and analysis, business process optimization, product implementation, enhancement, and upgrades and ongoing managed services. On demand services are concerned with the provision of software and hardware management and maintenance services to the customers deploying database, middleware and applications software. Education services include provision of training facilities to the customers, partners and employees through courses covering Oracle's product offerings.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 24

LEADING COMPANIES
Key Metrics Table 9:
Metric Revenues Net Income Profit Margin Total Assets
Source: Company Filings

Key Financials: Oracle Corporation

2004 10,156.0 2,681.0 26.4% 12,763.0 2005 11,799.0 2,886.0 24.5% 20,687.0 2006 14,380.0 3,381.0 23.5% 29,029.0 2007 17,996.0 4,274.0 23.7% 34,572.0 2008 22,430.0 5,521.0 24.6% 47,268.0

DATAMONITOR

Figure 6:

Revenues & Profitability: Oracle Corporation

Revenues Net Income Profit Margin 27.0% 26.5% 26.0% 25.5% 25.0% 24.5% 24.0% 23.5% 23.0% 22.5% 22.0% 2004 2005 2006 Year 2007 2008

25,000 20,000 US$ Millions 15,000 10,000 5,000 0

Source: Company Filings

DATAMONITOR

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Profit Margin (%)

LEADING COMPANIES
6.4 Hewlett-Packard Company
Table 10: Key Facts: Hewlett-Packard Company 3000 Hanover Street,Palo Alto,California 94304 1185,USA 1 650 857 1501 1 650 857 5518 www.hp.com October HPQ New York
DATAMONITOR

Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Source: Company Website

Hewlett-Packard offers a complete product portfolio spanning across personal computing, imaging and printing related products and services, and technology solutions. The company operates through seven business segments: enterprise storage and servers, HP services, software, the personal systems group, the imaging and printing group, HP Financial services and corporate investments. The enterprise storage and servers, HP services and software segment are aggregated under the technology solutions group. The company operates in over 170 countries around the world. The US is the largest geographical market (33.4% of the total revenue during 2007). Hewlett-Packard is headquartered in Palo Alto, California. Technology solutions group (TSG) includes three segments, enterprise storage and servers, HP services and HP software. TSG provides servers, storage, software and information technology services for enterprise and mid-market business customers to manage their current IT environments. Enterprise storage and servers ESS provides storage and server products to both small and medium sized businesses. Industry standard servers include entry-level and mid-range ProLiant servers, which run primarily on the Windows, Linux and Novell operating systems, and Intel Corporation (Intel) and Advanced Micro Devices (AMD) processors. Its product lines span across pedestal-tower servers, densityoptimized rack servers and HP's BladeSystem family of blade servers. Business Critical Systems Business critical systems include Itanium-based Integrity servers running on the HPUX, Windows, Linux and OpenVMS operating systems including the high-end Superdome servers and fault-tolerant Integrity NonStop servers.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 26

LEADING COMPANIES
Business critical systems also include the Reduced Instruction Set Computing (RISC)-based servers with the HP 9000 line running on the HP-UX operating system, HP AlphaServers running on both Tru64 UNIX and Open Virtual Memory System, and MIPs-based NonStop servers. The company has planned to phase out its Alpha server product line in recent times. Hewlett Packard's Storage Works offerings include entry-level, mid-range and highend arrays, storage area networks, network attached storage, storage management software and virtualization technologies, as well as tape drives, tape libraries and optical archival storage. The principal areas in which HP services operate are technology services, consulting and integration, and outsourcing services. It serves industries such as communications, media and entertainment, manufacturing and distribution, financial services and the public sector, and government and education services. It provides solutions to Hewlett Packard's customers in collaboration with enterprise storage, servers and software groups. It also collaborates with third-party system integrators, and software and networking companies. It also collaborates with imaging and printing group and personal systems group to provide managed print services, end user workplace services, and mobile workforce productivity solutions to enterprise customers. The technology services ranges from standalone product support to high availability services for multi-vendor environments and business continuity and recovery services. It also manages the delivery of product warranty support through its own service organization as well as through authorized partners. Consulting and integration segment provides consulting and integration services to implement technology and industry-specific solutions for customers. Consulting and integration also provides cross-industry solutions in the areas of architecture and governance, infrastructure, applications and packaged applications, security, IT service management, information management and enterprise Microsoft solutions. Outsourcing services segment offers IT management and outsourcing to support infrastructure, applications, business processes, end user workplace, print environment, and business continuity and recovery requirements. HP Software provides management software solutions including support, that allow enterprise customers to manage their IT infrastructure, operations, applications, IT services and business processes under the brand, HP OpenView. It also delivers comprehensive, carrier-grade software platforms for developing and deploying nextgeneration voice, data and converged services to network and service providers under the HP OpenCall brand.

Asia-Pacific - Software Datamonitor (Published December 2008) Page 27

LEADING COMPANIES
Hewlett Packard acquired Mercury Interactive Corporation, Bristol Technologies, SPI Dynamics and Opsware in fiscal 2007, which added transaction monitoring, applications security testing and data center automation capabilities to its portfolio. Personal systems group (PSG) is one of the leading providers of personal computers (PCs) in the world based both on volume and annual revenue. Its product line includes commercial PCs, consumer PCs, workstations, handheld computing devices, digital entertainment systems, calculators and other related accessories, and software and services. The commercial PCs include the HP Compaq business desktops and business notebooks and Tablet PCs. This segment targets small and medium sized businesses. Consumer PCs include the HP Pavilion and Compaq Presario series of multi-media consumer desktop PCs and notebook PCs, and HP Media Center and Voodoo Gaming PCs targeted at home users. Workstations are individual computing products designed for users demanding enhanced performance such as computer animation, engineering design and other programs requiring high-resolution graphics. HP provides workstations that run on UNIX, Windows and Linux-based operating systems. HP provides a series of HP iPAQ Pocket PC handheld computing devices that run on Windows Mobile software. These products range from value devices such as music or Global Positioning System receivers to advanced devices with voice and data capability. PSG's digital entertainment products include HD DVD, RW drives and DVD writers, plasma and LCD flat-panel televisions, and HP Digital Entertainment Center, which allow consumers to access their music, movies, home videos and photos from a single device via remote control. Hewlett-Packard is the leading imaging and printing systems provider in the world. The segment's portfolio of offerings include consumer and commercial printer hardware, printing supplies, printing media and scanning devices. The segment also provides imaging solutions in the commercial markets, from managed print services solutions to addressing new growth opportunities in commercial printing in areas such as industrial applications, outdoor signage, and the graphic arts business. The groups its inkjet printer units and digital photography and entertainment products and services into consumer hardware, LaserJet printers and graphics and imaging products into commercial hardware, and break out printer supplies separately. Inkjet systems include desktop single function and inkjet all-in-one printers, photo, and business inkjet printers and scanners.

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LEADING COMPANIES
Digital imaging products and services include photo specialty printers, photo kiosks, digital cameras, accessories and online photo services through Snapfish. The digital imaging solutions of the company are differentiated to traditional imaging in terms of quality, cost and ease of use. The company announced to have an alternative business model for its HP-branded cameras in November 2007. LaserJet systems include monochrome and color laser printers, printer-based multi-function devices and total print management solutions for enterprise customers. A key initiative in this area of business has been to drive color printing in office segment. Graphics and Imaging products include large format (DesignJet) printers, Indigo and Scitex digital presses, digital publishing solutions and graphics printing solutions. A key initiative for IPG is to capture high-value pages by developing compelling solutions for the industrial, commercial printing and graphics segments. This segment includes LaserJet toner and inkjet cartridges and other printing-related media. These supplies include HP-branded Vivera and ColorSphere ink and HP Premium and Premium Plus photo papers, which are designed to produce faster prints with increased print quality. The HP Financial services offers leasing, financing, utility programs and asset recovery services, financial asset management services for large global and enterprise customers. It also provides specialized financial services to small and medium sized businesses, and educational and governmental entities. This group provides innovative and customized services to counter technology obsolescence. Corporate investments segment is better known for its brand ProCurve Networking, an Ethernet switch product that enhances computing and enterprise solution. Corporate Investments derives revenues from licensing specific Hewlett Packard's technology to third parties. This segment is managed by the Office of Strategy and Technology. Hewlett-Packard Laboratories is a part of the company's corporate investments.

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LEADING COMPANIES
Key Metrics Table 11:
Metric Revenues Net Income Profit Margin Total Assets Total Liabilities Employees
Source: Company Filings

Key Financials: Hewlett-Packard Company

2003 73,061.0 2,539.0 3.5% 73,061.0 25,469.0 142,000 2004 79,905.0 3,497.0 4.4% 79,905.0 28,588.0 151,000 2005 86,696.0 2,398.0 2.8% 86,696.0 31,460.0 150,000 2006 2007 91,658.0 104,286.0 6,198.0 7,264.0 6.8% 7.0% 81,981.0 88,699.0 43,837.0 50,173.0 156,000 172,000
DATAMONITOR

Figure 7:

Revenues & Profitability: Hewlett-Packard Company

Revenues Net Income Profit Margin 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2003 2004 2005 Year 2006 2007

120,000 100,000 US$ Millions 80,000 60,000 40,000 20,000 0

Source: Company Filings

DATAMONITOR

Asia-Pacific - Software Datamonitor (Published December 2008) Page 30

Profit Margin (%)

MARKET FORECASTS

CHAPTER 7

MARKET FORECASTS

7.1

Market Value Forecast

In 2013, the Asia-Pacific software market is forecast to have a value of $139.6 billion, an increase of 68.4% since 2008. The compound annual growth rate of the market in the period 2008-2013 is predicted to be 11%. Table 12: Asia-Pacific Software Market Value Forecast: $ billion, 20082013 Year 2008 2009 2010 2011 2012 2013 CAGR, 2008-2013:
Source: Datamonitor

$ billion 82.9 91.4 100.6 111.5 124.5 139.6

% Growth 7.40% 10.20% 10.00% 10.90% 11.60% 12.20% 11.0%

DATAMONITOR

Figure 8:

Asia-Pacific Software Market Value Forecast: $ billion, 20082013

$ billion 160 140 120 $ billion 100 80 60 40 20 0 2008 2009 2010 2011

% Growth 14.0% 12.0% 10.0% % Growth 8.0% 6.0% 4.0% 2.0% 0.0% 2012 2013

Source: Datamonitor

DATAMONITOR

Asia-Pacific - Software Datamonitor (Published December 2008) Page 31

APPENDIX

CHAPTER 8

APPENDIX

8.1

Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-checked and presented in a consistent and accessible style. Review of in-house databases Created using 250,000+ industry interviews and consumer surveys and supported by analysis from industry experts using highly complex modeling & forecasting tools, Datamonitors in-house databases provide the foundation for all related industry profiles Preparatory research We also maintain extensive in-house databases of news, analyst commentary, company profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market overview Definitions Market definitions are standardized to allow comparison from country to country. The parameters of each definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the market and our clients Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends Datamonitor aggregates and analyzes a number of secondary information sources, including:

National/Governmental statistics International data (official international sources) National and International trade associations Broker and analyst reports Company Annual Reports Business information libraries and databases Modeling & forecasting tools Datamonitor has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand-related factors Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

Asia-Pacific - Software Datamonitor (Published December 2008) Page 32

APPENDIX
8.2 Industry Associations
World Information Technology and Services Alliance (WITSA) 8300 Boone Boulevard, Suite 450, Vienna, VA 22182-2633, USA Tel: 1 571 265 5964 Fax: 1 703 893 1269 http://www.witsa.org

8.3

Related Datamonitor Research

Datamonitor Industry Profiles Global Software Software in France Software in Europe Software in Belgium Software in Germany Software in the United Kingdom Software in Japan Software in the United States Software in China Software in Italy Software in Russia

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