By Cassandra Balentine
This year represents the 35th publication of the Software 500, a worldwide ranking of software and software services companies. Market consolidation continues to make the research of this guide increasingly difficult, so next year it will evolve to the Software 250, making it a more competitive ranking. Our team will still perform extensive research ensuring all relevant company information is gathered. We also plan to introduce new growth charts that bring fresh insight with the data research gathered for this annual project.
For 2017, we continue with the same format as previous years. The research for this year’s Software 500 looks at the 2016 fiscal year, comparing it to 2015 revenue data from both public and private software and software services companies. To ensure consistency, the fiscal years recognized by Software Magazine for 2016 include March 31, 2016 to February 28, 2017 and March 31, 2015 to February 29, 2016 for the 2015 fiscal year.
The total software and services revenue from the 2016 fiscal year comes in at $834B, compared to 2017’s $804B, a 3.59 percent increase.
Top grossing Primary Business Sectors included Middleware/App Server/Web service, with only IBM representing the category with $70.2 B; followed by Enterprise IT management with two companies averaging $25.7B; and Operating Systems, representing six companies and averaging an annual revenue of $13B.
The software and software services providers of today benefit from the maturation and continued adoption of the cloud, analytics, and mobility. With the stage set, we’re entering a new era of communications across every vertical market.
The continued evolution of business intelligence (BI) and cloud-based applications have enabled many leading software companies to truly present artificial intelligence (AI) platforms—and further machine learning technologies—that will transition us to a smarter world connected with the Internet of Things (IoT).
It’s an exciting time to cover the market. Consumers and businesses alike benefit from the opportunities these technologies present, but the future will not be without challenges.
It is also important to note that the Software 500 is focused on software companies that report software- and software services-specific revenue apart from other revenue sources. Therefore, technology giants like Amazon and Google are not included in the list, but are not forgotten editorially and are regularly monitored by our editorial team. Additionally, more than 90 percent of the ranking is made up of publicly traded companies. Private companies are encouraged to apply, but cannot be included without their cooperation.
Employee information is a telling statistic for the overall health of the industry. This year, companies in the Software 500 reported a total of 5,292,559 employees, compared to the 2016 published Software 500, which was reported at 5,901,438—a slight decline.
Top employers include Accenture, IBM, and Tata Consultancy, reporting 384,000, 380,000, and 353,843 worldwide employees respectively.
Further, results show top markets for employees include Human Resources/Workforce Management Systems, Communication/Collaboration, and Application Development/Testing/Lifecycle Tools, employing 173.7, 128.9, and 66.5 percent more employees as an overall market segment in 2016 than in 2015, respectively.
There were slight changes in the top ten in 2017 compared to the 2016 ranking. However, no companies from last year’s list were shifted out or into the 2017 top ten. IBM remained at number one, followed by Microsoft at two. The first change comes from Oracle, which slips from number three in 2016 to number six this year. HP Inc. moves up from seven to three. Accenture moves down from four to five. Hewlett-Packard Enterprise (HPE)—which recently announced its merger with Micro Focus, moved up to four from six. Ericsson moves up to seven from the tenth spot in last year’s ranking. SAP AG moves down to eight from five. Apple moves down one to nine from eight. Tata Consultancy also moves down one to ten, compared to last year’s ranking at nine.
Top performer, IBM, is busy developing technologies of the future, including AI and the IoT.
According to the company’s 2016 annual report, the company has reinvented itself for its users, focusing on AI with its Watson product, as well as on IBM Cloud.
IBM’s 2016 annual report states that the company’s major operations consist of five business segments, Cognitive Solutions, Global Business Services, Technology Services & Cloud Platforms, Systems, and Global Financing. The report notes that while the company is focused on cognitive solutions, cloud platform, and industry, cloud and industry technologies are embedded across IBM’s offerings. “These core businesses continue to run clients’ most critical business processes. IBM’s hardware systems are being designed from the ground up to power the cloud and cognitive systems of the future. The company’s technology services help clients move to the cloud, embedding cognitive capabilities tailored for their industry. The company’s software offerings are simultaneously being made available for the cloud as well as being connected to the cloud where our clients choose to keep them on premises. Additionally, cognitive capabilities are being added to these offerings to provide new levels of innovation. In short, all of IBM is transforming to support the way its clients are transforming,” states the annual report.
It also states that the company supports two primary goals, helping enterprise clients become more innovative, efficient, and competitive through the application of business insight and IT solutions, and providing a long-term value to its shareholders. IBM’s business model has been developed over time and is dynamic in order to adapt to a changing industry.
The second top performer is another household technology name, and longstanding top ranking company, Microsoft.
According to the company’s 2016 10K SEC filing, the company uses three reporting segments—Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.
With these units, Microsoft is on a mission is to “empower every person and every organization on the planet to achieve more. We strive to create local opportunity, growth, and impact in every country around the world. Our strategy is to build best-in-class platforms and productivity services for an intelligent cloud and an intelligent edge infused with AI,” according to the filing.
The company sets three focus areas for its vision, to reinvent productivity and business processes, build an intelligent cloud platform, and create more personal computing. “We believe we can significantly enhance the lives of our customers using our broad portfolio of productivity, communication, and information products and services that span platforms and devices. Productivity is our first and foremost objective, to enable people to meet and collaborate more easily, and to effectively express ideas in new ways. We invent new scenarios that in turn create opportunity for our partners and help businesses accelerate their digital transformation while respecting each person’s privacy choices,” says Microsoft’s 2016 10K.
The foundation for these efforts rests on advancing its leading productivity, collaboration, communication, and business process. On December 8, 2016, Microsoft completed its acquisition of LinkedIn Corporation, which the company expects to accelerate the growth of Office 365, Dynamics 365, and LinkedIn.
The biggest news for this year’s third ranking company, HPE, is the recently announced merger with Micro Focus. Completed on September 1, 2017, the newly combined company is committed to driving customer-centered innovation at enterprise scale to deliver software solutions across hybrid IT, according to a press release issued by Micro Focus announcing of the deal’s completion.
According to Micro Focus, when the merger completed, the combined company became the largest U.K. technology firm listed on the London Stock Exchange, with a revenue of $4.4B. The transaction is valued at $8.8B in a series of major moves by Micro Focus in three years including the acquisitions of Attachmate Group, Serena Software, and now HPE Software.
“We are bringing together a powerful combination of technology and talent uniquely positioned to drive customer-centered innovation at enterprise scale—enabling organizations to maximize the ROI of existing software investments while embracing the new hybrid model for enterprise IT,” states Chris Hsu, CEO, Micro Focus, in a press release announcing the merger’s completion.
Top Growth Companies
Many companies in the Software 500 show extraordinary growth. In order to highlight a vast range of companies, we break down the highest growth companies in a variety of revenue segments. In each category we highlight top-performing companies in rank order.
Keeping Fast Company I
In this breakout, we highlight two groups, those reporting more than $1B USD in software and services revenue in the reporting year and those reporting between $100M and $1B. Top performers reporting more than $1B include Endurance International Group Holdings, Leidos, and MicroFocus International—each reporting close to 50 percent growth.
Endurance International Group Holdings, Inc. powers small businesses worldwide with products and technology to vitalize online web presences, email marketing, and mobile business solutions. The Endurance family of brands includes Constant Contact, Bluehost, HostGator, iPage, Domain.com, BigRock, SiteBuilder, and SinglePlatform.
Leidos is a science and technology solutions and services company dedicated to solving challenges in defense, intelligence, homeland security, civil, and health markets. Its 32,000 employees support vital missions for government and commercial customers. The company is headquartered in Reston, VA.
Recently, the company reported that it was awarded a prime task order contract by the Department of Energy’s Energy Information Administration (EIA), under the Leidos EOP IV IDIQ support contract, to provide comprehensive performance solutions for the 2018 Commercial Buildings Energy Consumption Survey (CBECS) and 2018 Commercial Buildings Energy Supplier Survey. The single-award cost-plus-fixed-fee contract has a four-year period of performance, and an anticipated contract value of $25 million. CBECS survey work will be performed across the nation.
Micro Focus is a global enterprise software company positioned to help customers extend existing investments while embracing new technologies in a world of Hybrid IT. Providing customers with a world-class portfolio of enterprise-grade scalable solutions with built-in analytics, Micro Focus delivers customer-centered innovation across DevOps, Hybrid IT , Security and Risk Management , and Predictive Analytics.
As previously discussed, the company recently announced the completion of its merger with HPE software business. According to the company, this merger brings together two leaders in the software industry to form a new, combined company uniquely positioned to help customers maximize existing software investments and embrace innovation in a world of Hybrid IT.
In the $100 to $1B category, Square, NetScout Systems, and Alibaba report 123, 111, and 109 percent growth, respectively.
Square, Inc. offers tools to help sellers start, run, and grow their businesses by enabling sellers to accept card payments. The company also provides reporting and analytics, next-day settlement, and chargeback protection. Square was founded in 2009 and is headquartered in San Francisco, CA with offices in the U.S., Canada, Japan, Australia, Ireland, and the UK.
Square recently announced a strategic partnership with Eventbrite, in which Square will drive Eventbrite’s payments systems, including online, mobile, and in-person transactions.
NetScout Systems Inc. provides business assurance for today’s most demanding service provider, enterprise, and government networks. The company’s Adaptive Service Intelligence technology continuously monitors the service delivery environment to identify performance issues and provides insight into network-based security threats, helping teams quickly resolve issues that may lead to business disruptions or impact user experience. NetScout delivers unmatched service visibility and protects the digital infrastructure that supports our connected world.
This Fall the company announced the nGenius Business Analytics solution, which is designed to provide a next-generation, smart data approach to analytics that makes wired data consumable for big data applications in a scalable, cost-effective manner.
Alibaba Group is aiming to build the future infrastructure of commerce. At its Brand Rights Holders Day in Beijing, the company unveiled enhancements to its Intellectual Property Protection (IPP) Platform. In the first month since the express technology enhancements were made, almost all cases submitted by rights holders were handled and closed within 24 hours, among which more than 80 percent of the listings were also taken down. Alibaba’s IPP platform is used by brands and IP owners to flag and request the take down of counterfeit or IP-infringing product listings.
Key highlights of Alibaba’s IPP platform technology upgrades include a single entry point across all Alibaba eCommerce platforms and streamlined process to assess the validity of complaints; a more automated complaints processing, analysis, and product-authentication system powered by new algorithms and data models; a dedicated team of IPR professionals to reduce response time for inbound inquiries, as well as proactive outreach to new IPP users and those with more complicated IPR cases; broader brand-protection technological capabilities—for instance, multi-lingual trademark-recognition; and improved search engine optimization for easier discovery of and access to the IPP platform.
Keeping Fast Company II
Further down the list, we highlight top growth performers in those reporting $50 to $100M and $30M to $50M in software and software services revenue. Leading the first category is Network-1 Technologies, with almost 300 percent growth; Gridsum Holdings with 60 percent, and Opera Software with 56 percent.
Network-1 Technologies is engaged in the development, licensing, and protection of its intellectual property and proprietary technologies. Network-1 works with inventors and patent owners to assist in the development and monetization of their patented technologies. The company currently owns 34 patents covering various telecommunications and data networking technologies as well as technologies relating to document stream operating systems and the identification of media content.
Its strategy includes continuing to pursue licensing opportunities for its Remote Power Patent and its efforts to monetize two patent portfolios—the Cox and Mirror Worlds patent portfolios—acquired by Network-1 in 2013.
Gridsum Holding Inc. is a provider of cloud-based, big data analytics, machine learning, and AI solutions for multinational and domestic enterprises and government agencies in China. The company’s core technology, the Gridsum Big Data Platform, is built on a distributed computing framework and performs real-time, multi-dimensional correlation analysis of both structured and unstructured data. This enables Gridsum’s customers to identify complex relationships within their data and gain new insights that help them make better business decisions.
The company recently won China’s government contract for the Remote Trial Service Information Construction Project of Beijing Intellectual Property Court, according to the official announcement of Beijing Municipal Bureau of Finance about government procurement on August 21, 2017.
Since its founding in 1996, Opera has been a pioneer in shaping the future of the internet. Providing faster and more innovative web browsers, the company is the everyday browser of choice for more than 350 million people.
The company recently released a new version of its most popular mobile browser application, Opera Mini, for Apple iPhone users. The revamped user interface features a newsfeed on its start page and helps users get the news four times faster than the previous version. An AI news engine is also rolling out to selected countries, bringing the latest and most insightful news to the user without any effort in setup.
Opera’s AI news engine uses real-time intelligence ranking that is powered by machine learning and deep learning. Once users start engaging with news content, it begins defining a unique user profile by accumulating news categories and publisher domains the user clicks on.
Moving on to the top performers in the $30M to $50M revenue segment, we highlight Virinchi Technologies with 46 percent growth, Mitek Systems with 37 percent growth, and Asure software with more than 34 percent growth.
Virinchi Limited is an IT products and services company offering world-class products and services to its global clients operating in various industry verticals. Virinchi is one of India’s early starters in the truly web-based IT products and solutions space, offering an array of offerings both off-the-shelf as well as customizable, for both the business to business and the business to consumer markets. These products were developed by a team of resources with extensive experience in varied domains since the year 1991.
The company’s business knowledge is complemented by a wide spectrum of products and service offerings. Together, they constitute its IT Capability Framework, which enables it to devise the most technologically advanced and cost-effective solutions in every business domain using information technology.
Mitek provides mobile capture and identity verification software solutions. The company’s ID document verification allows an enterprise to verify a user’s identity during a mobile transaction, enabling financial institutions, payments companies, and other businesses operating in highly regulated markets to transact business safely while increasing revenue from the mobile channel. Mitek also reduces the friction in the mobile users’ experience with advanced data prefill. These innovative mobile solutions are embedded into the applications of more than 5,800 organizations and used by more than 80 million consumers for mobile check deposit, new account opening, and insurance quoting.
Mobile Verify, the company’s ID verification solution, is used by financial services organizations and leading brands across the globe to create trust in the digital channel for safe onboarding, fast money movement, and user authentication. Digital leaders trust identity verification with Mobile Verify because of its proven, customer friendly user experience and because it keeps them in compliance with ever-increasing Know Your Customer and Anti-Money Laundering regulations.
Asure Software, Inc., headquartered in Austin, TX, offers intuitive and innovative technologies that enable companies of all sizes and complexities to operate more efficiently, building companies of the future. Its cloud platform has helped more than 7,500 clients worldwide to better manage their people and space for a mobile, digital, multi-generational, and global organization. Asure Software’s suite of solutions include human capital management (HCM), workforce management solutions, time and attendance, and workspace asset optimization and meeting room management solutions.
The company recently announced the acquisition of iSystems, LLC. Based in South Burlington, VT, iSystems through its flagship product, Evolution HCM, offers payroll, tax management, and human resources software combined with comprehensive back-end service bureau tools.
Keeping Fast Company III
In the final growth category, we look at the top performing companies in the $10M to $30M range, as well as those that fall under $10M. In the first grouping, we highlight Finjan Holdings with 292 percent growth; N-iX, reporting more than 77 percent growth over the previous fiscal year; and Radcom with 58 percent growth.
Finjan is cybersecurity provider. Its inventions are embedded within a portfolio of patents focusing on software and hardware technologies capable of proactively detecting previously unknown and emerging threats on a real time, behavior-based basis.
N-iX is a Ukraine and Poland based provider of software development outsourcing services, game development, and professional services with more than 700 technical experts. The company partners with technology businesses globally to create innovative products and help companies implement digital transformations.
Radcom provides NFV-ready service assurance and customer experience management solutions for Communications Service Providers (CSPs). RadCom’s MaveriQ software continuously monitors network performance and quality of services to optimize user experience for CSPs’ subscribers. RadCom specializes in solutions for next-generation mobile and fixed networks, including LTE, VoLTE, IMS, and others. By assuring physical, NFV-based and hybrid networks, MaveriQ enables CSPs to smoothly migrate their networks to NFV.
The Software 500 ranking and corresponding growth charts enable us to look at the overall software industry to identify trends through revenue growth, R&D investments, and employee staffing.
In addition to the published ranking in digital edition format, the Software 500 and its archives are available online 24/7 at softwaremag.com. Access is free, and enables you to sort by company, primary business sector, multiple years, and more. The following pages present the 35th annual Software 500 ranking, which is based on reported revenues from the 2016 fiscal year compared to 2015.
Nov2017, Software Magazine