Gartner says AIM market is changing business models

Research shows digital business models will push application infrastructure and middleware spending beyond $30 billion in 2018

The application infrastructure and middleware (AIM) market grew 12% in 2017 and shows a significant shift toward digital business models that harness AI, IoT and cloud computing.

So claims analyst firm Gartner's, whose latest figures show that AIM market revenue reached $28.5 billion in 2017 - an increase of 11.9% from 2016. The company also forecasts that the AIM market will grow even faster in 2018, after which spending growth will slow each year, reaching around 5% in 2022.

"A new approach to application infrastructure is the foundation organisations build their digital initiatives upon, and therefore a robust demand in the AIM market is a testament to the occurrence of digitalisation," said Fabrizio Biscotti, research vice president at Gartner.

"The more companies move towards 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."

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The research also shows that momentum in the AIM market is shifting from market incumbents to challengers. Licensed, on-premises application integration suite offerings that make up larger segments served by market incumbents such as IBM and Oracle achieved single-digit growth in 2016 and 2017. Gartner expects this growth to continue through 2022.

Small challenger segments, built predominantly around cloud and open-source-based application integration (iPaaS) offerings, are predicted to enjoy double-digit growth.

The iPaaS segment, which is still a small part of the overall market, topped $1 billion in revenue for the first time in 2017 after growing over 60% in 2016 and 72% in 2017. This makes iPaaS one of the fastest-growing software segments.

Biscotti added that the most successful challengers in the AIM market will be those that position their products as complementary to, rather than replacements for, the existing legacy software infrastructure that is common in most large organisations.

"While new agile challengers may seem better fits for those pursuing digital initiatives, the underlying reality is that legacy middleware and software integration platforms will persist," added Biscotti.

"Pure-play cloud integration is a niche requirement today. Most buyers have more extensive requirements as they pursue hybrid integration models. The long-term market composition is likely to consist of a broad spectrum, from generalist comprehensive integration suites to more-specialised fit-to-purpose offerings."

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