Carla Arend (Lead analyst European Cloud Research)

Systems management software (SMS) is a vibrant market growing in importance. European organizations are building modern IT infrastructures to support their digital transformation initiatives, and cloud service usage is becoming mainstream and needs to be managed well. SMS is critical in delivering the levels of automation and orchestration necessary for scale-out applications running in hybrid and multi-cloud environments and to provide modern IT infrastructure for developers and DevOps professionals. Our annual datacenter survey of 640 European respondents shows the following priorities for SMS investment:

  • Improving user experience through focus on ServiceDesk.
  • Utilizing Big Data and analytics to drive operational efficiency, automation, and performance. The use of Big Data and analytics tools in SMS can propel IT organizations forward towards becoming internal service brokers.
  • Hybrid cloud and multicloud. Cloud SMS is essential in providing various public and private cloud services through a single portal, and for managing workloads across multiple cloud environments.
  • Containers. Although container adoption is still immature, systems management tools need to embrace container management to work alongside virtual machine workloads.
  • Service catalog. A service catalog spanning traditional IT, private, and public cloud services is essential to driving unified management, policy, and a homogeneous user experience.

There is a renewed focus on SMS as a critical component for achieving digital transformation success, improving user experience, and operating a modern, efficient, flexible and reliable IT platform. These forces are driving the European SMS market forecast to achieve total revenues of $6.7 billion by 2020 (at 7.6% CAGR), according to IDC’s European semi-annual software tracker.

As it spans many different disciplines, the European SMS market is highly fragmented, with different leaders for the various sub-markets. Looking at the market overall, IDC’s semi-annual software tracker reveals that Microsoft has surpassed IBM to top market share rankings in Western Europe, with IBM, BMC, Hewlett-Packard Enterprise, and VMware completing the rest of the top 5 vendors.

Diving into the sub-markets it becomes apparent that additional vendors play a key role in the European systems management market: ServiceNow is leading the rapidly growing problem management market, while Splunk is leading the IT Event and Log Management Tools market. However, there is a fast-growing group of disruptors emerging, including AWS, Saltstack, Turbonomic, Chef, Docker, Puppet, Appdynamics, New Relic and Dynatrace, who are addressing new use cases in systems management very efficiently.

Management of cloud environments is a primary driver of systems management growth. European cloud SMS is expected to grow at a CAGR of 27.2% and will propel the market to $2.1 billion in 2020. In this area, the biggest focus is on the performance and event management segment, which encompasses monitoring and IT operations analytics solutions for optimizing application performance across hybrid cloud infrastructure. Flexible cloud-based systems that can take advantage of open source flexibility are increasingly in demand so that customers can tie together public cloud services with on-premise dashboards and tools for monitoring, maintenance, and analytics.

VMware remains the market leader in the European cloud system management software market, with a strong focus on cloud monitoring, analytics and automation. Microsoft, with some of the strongest growth among major players, is making a concerted effort to become a cloud-first provider. ServiceNow also emerges as a rapidly growing competitor in this segment, in part through expansion into non-ITSM and SMB market segments through tailored and simplified service offerings.

Overall, IDC sees systems management as a vibrant market with many innovative players shaking up the established vendors and driving 3rd platform relevance and innovation in a mature market. Growth prospects are good as European organizations are acknowledging the importance of SMS for digital transformation success, of achieving customer satisfaction, and the need to manage hybrid and multi-cloud environments as well as DevOps processes efficiently.

If you want to learn more about the dynamics of the European systems management market, please check out the following reports:

Western Europe Systems Management Software Market Shares, 2015 and 1H16
Western Europe Systems Management Software Forecast, 2016-2020
Western Europe Cloud System Management Software Market Shares, 2015
Western Europe Cloud System Management Software Forecast, 2016-2020