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2013 Software 500

Employement up 10 percent; overall revenue up four percent.

By John P. Desmond

Overall revenue for Software 500 companies this year reached $672.9 billion, up 4.5% from last year’s $643.6 billion, according to findings of the 2013 Software 500 ranking of the world’s largest software and services companies, now in its 31st year.

The total number of employees in the Software 500 was up 9.5% to 4,924,121, compared to 4,495,407 in last year’s survey.

Average growth in software license and service revenue for the 2013 Software 500 companies was 12.9%.

The top seven ranked companies stayed in the same order this year: IBM, Microsoft, Hewlett-Packard, Oracle, Accenture, EMC, and SAP, respectively. NTT Data moved up to No. 8 from No. 11 last year; CSC moved to No. 9 from No. 8 last year; Hitachi stayed at No. 10; Capgemini moved to No. 11 from No. 9 last year; Atos S.A. moved up to No. 12 from No. 15 last year, the company’s first year on the list. SAIC stayed at No. 13; SYNNEX stayed at No. 14; General Dynamics took No. 15.

Growing most dramatically in the top 10 was NTT Data, with its service revenue increasing 17% to reach $15.9 billion.

In employee terms, the biggest employer continues to be IBM, with a head count of 466,995 at the end of 2012. That is an increase of 33,633 from the previous year, or 7.8%.

Average research and development investment for the 2013 Software 500 was 12.7% of revenue, a healthy indicator that software companies are investing in their future.

Most of the employment in the Software 500 comes from firms that outsource professional technical staff to support IT operations. The IT Consulting/Staffing, Outsourcing Services, and System Integration Services business sectors make up 75 companies, 15% of the Software 500, with 2,313,123 employees between them, 47% of total employment in the 2013 Software 500.



Click images of charts to view PDFs.

Revenue Growth Leaders
Number one in companies with revenue over $1 billion is Google Inc., No. 51 with $2.35 billion in software and services revenue—representing growth of 71%. Google provides a variety of tools including advertising programs and cloud computing solutions.

Next is SCSK Corp., No. 44 with $2.75 billion in revenue, representing growth of 66%. Created through the merger of Sumisho Computer Systems Corporation and CSK Corporation in October 2011, the IT services company focuses on cloud computing, IT platforms, IT management, business services, financial systems, and industrial systems.

Third is iGATE Corp., No. 82 with $1.1 billion in revenue, growing 38%. IGATE is an IT services and outsourced development company with 27,616 employees at the end of 2012. Most of its operations are in India. The company describes itself as an integration technology and operations company with a focus on business outcomes. In a recent win, iGATE secured a $100 million contract with MetLife to provide infrastructure services to the insurance provider.

Fourth in growth among companies with over $1 billion in revenue is, No. 53, growing 37% to reach $2.3 billion in revenue. The cloud computing company focuses on sales and customer service. Recently, was positioned as a leader in Gartner’s Magic Quadrant for sales force automation. This July, bought ExactTarget, a cloud marketing platform, for $2.5 billion. The ExactTarget product allows companies to engage in one-to-one marketing and track response from a single platform using email, text and voice messaging, Internet landing pages, Twitter, and Facebook.

Also notable for growth among companies with over $1 billion in revenue are: BlackBerry, No. 29, growing 26% to reach $4.4 billion; Red Hat, No. 77, growing 25% to reach $1.1 billion; Tata Consultancy, No. 16, growing 23% to reach $10 billion; and VMware, No. 27, growing 22% to reach $4.6 billion.

Among companies earning between $100 million and $1 billion in revenue, the growth leader is Babylon Ltd., No. 224 with growth of 187% to reach $177.6 million. The company offers a computer dictionary and translation program.

Next in the category is Electronics for Imaging (EFI), No. 221, growing 127% to reach $184.6 million in software and services revenue. EFI supplies computer peripherals such as color digital print controllers, as well as print production workflow and management information software.

Tableau Software, No. 250, grew 105% to reach $127.7 million in revenue. The business intelligence/analytics software supplier recently announced Tableau Online, a cloud-based version of its Tableau Server product that can connect to a range of partner offerings.

Workday Inc., offering a workforce management system, grew 104% to reach No. 188 at $273.7 million in revenue. Workday targets Oracle and SAP customers by promising services at a lower cost. Public television station, WGBH Boston, became a Workday customer in July for its financial and human resource systems in the cloud.

Vinay Mehra, CFO, WGBH, stated, "We are excited to have technology that will make us more efficient operationally, so we can focus on growth and bringing innovative and inspiring content to our audiences."

Splunk Inc., offering big data analysis tools, grew 83% to reach $121 million and No. 258. In July, the company announced Hunk, a data exploration tool for Hadoop, the open-source software framework for data-intensive distributed applications (apps). The Safeway supermarket chain uses Splunk to perform real-time and historic data analysis across its IT infrastructure.

Bazaarvoice, at No. 268, grew 65% to reach $106.1 million in revenue. One of three companies in the Social Business/Social Analytics sector of the Software 500, Bazaarvoice was recently invited by Forrester Research to participate in a Forrester Wave report on social depth platforms. The Bazaarvoice Conversations platform encompasses ratings and reviews, questions and answers, and stories from customers. Forrester stated that strengths of Bazaarvoice include "marketer-friendly administration tools, robust analytics, and mobile capabilities."

Among companies with $50 million to $100 million in revenue, the growth leader was NQ Mobile, No. 282 with $91.8 million in revenue and a growth rate of 126%. Among its services in mobile security, NQ Mobile operates a security lab and maintains a database of malware. August findings showed that China and Russia were home to the most infected mobile devices, with 32% in China and 17% in Russia affected. In May 2012, NQ Mobile acquired 55% of NationSky, a supplier of mobile services to 1,250 enterprises in China.

Second in the category is Radisys, No. 332 at $50.2 million, growing 65.4%. Concentrating on wireless infrastructure for the telecom, aerospace, and defense industries, the company announced in June its MPX Operating Software, an operating system serving as the foundation of the company’s media processing and communication services software. The plan is to offer new capabilities for service providers involving interactive communication services. Radisys was founded in 1987 by former employees of Intel.

Next is Phacil Inc., an enterprise IT management company focused on government contracts, which reached No. 302 with $75.6 million in revenue, a 48% growth rate. The company was designated in June as a CMMI Maturity Level 3 organization by the Software Engineering Institute of Carnegie Mellon University, a rigorous standard of best practice. Phacil is the 22nd U.S. company to achieve this level in services. Phacil also recently won a contract to provide security services to the U.S. Census Bureau.

Among companies in the $30 million to $50 million revenue range, Bomgar Corp. achieved 29% growth to reach $36.4 million and a rank of 362. Bomgar offers remote support via an appliance. Its customers include the Imperial College of London, which uses Bomgar to provide remote technical support to 6,500 staff members. VFA Inc., No. 359, offering facilities management software, grew 24% to reach $38.1 million in revenue. Digimarc Corp., offering digital watermarking of many types of content, grew 23% to reach $44.4 million and No. 341.

Among companies with $10 million to $30 million in revenue, first was Unwired Planet, growing 274% to reach No. 424 with $15 million in revenue. Formerly named OpenWave, the company refers to itself as "the inventor of the mobile Internet," with deep technical roots in the field. Asure Software, No. 405, a player in workforce management, grew 82% to reach $20 million in revenue. Attunity Ltd., No. 388, in the data integration market, grew 68% to reach $25.5 million in revenue; the company recently sold its data replication products to consumer data company Equifax.

Here is a review of selected business sector results in the 2013 Software 500.

Financial Apps
The leader is FIS Global, No. 22 with $5.8 billion in software and services revenue, a growth rate of 3% over the previous year. Founded in 1968 as Systematics, FIS Global formed in formed in 2006 with the merger of Certegy Inc. with Fidelity Information Services, had 35,000 employees at the end of 2012. In recent news, FIS announced that customers of merchants who are members of Merchant Customer Exchange, a group united to form a mobile commerce platform, will be able to pay using any smartphone or tablet at the point of sale, functionality enabled by FIS mobile payment software.

Fiserv, second in the category at No. 33 with $3.9 billion in software and services revenue, has grown by acquisition since its founding in 1984. In recent news, Fiserv won a contract with Founders Federal Credit Union to deliver online, mobile, and tablet banking services via its Corillian Online and Mobiliti products.

Verisk Analytics provides information and analytical tools for mortgage and insurance companies. The company grew 15% to reach $1.5 billion in revenue and No. 63 in the ranking. Verisk Insurance Solutions includes the industry brands of ISO, AIR Worldwide, and Xactware.

SS&C Technologies grew 49% to reach $551.8 million in revenue, No. 123 in the ranking. Some 5,500 financial services organizations, overseeing more than $26 trillion in assets, manage their investments using SS&C products and services. SS&C’s data center network offers a range of middle- to back-office outsourcing services as well.

Ellie Mae, a company serving the residential mortgage industry, grew 84% to reach $101.8 million in revenue, No. 272. In 2012, the total volume of mortgages that ran through Ellie Mae’s Encompass360 mortgage management software was approximately 3 million, or 20% of all U.S. mortgage originations.

BlackLine Systems, focusing on account reconciliation software, grew 60% to reach No. 390 in the ranking with software and services revenue of $25.1 million. Therese Tucker, founder/CEO, BlackLine, has achieved success in offering the BlackLine Financial Close Suite via the software-as-a-service delivery model.

Security Tools/Systems
Symantec is the leader at No. 20, with revenue of $6.7 billion and a growth rate of 9%. The leader in security and backup recently released a study with Ponemon Institute on the cost of data breaches, finding that heavily regulated fields—including the healthcare, finance, and pharmaceutical industries—experience more breaches. In another recent report, Symantec found a dramatic increase in targeted attacks in 2012, including cyber-espionage attacks aimed at stealing intellectual property.

Sourcefire grew 35% to reach $223.1 million in software and services revenue, making it No. 206. The company sells network security appliances based on Snort, an open-source intrusion detection system. The company was founded by Martin Roesch, the creator of Snort. In July, the company agreed to be acquired by Cisco at a reported price of $2.7 billion in cash.

Guidance Software grew 24% to reach $129.5 million in revenue and No. 249. Guidance, best known for its EnCase computer forensic software, is organized around markets of digital forensics, cybersecurity incident response, and e-discovery. EnCase is used by many government agencies, more than 65 percent of the Fortune 100, and more than 40 percent of the Fortune 500 to conduct digital investigations of servers, laptops, desktops, and mobile devices.

Proofpoint, No. 267, grew 30% to reach $106.3 million in revenue. Originally the company was concentrating on inbound and outbound email security, Proofpoint later branched into appliances running its anti-spam software.

A Proofpoint product announced in July helps companies in regulated industries monitor social media contributions from employees on Microsoft Yammer and Salesforce Chatter to help guard regulatory compliance.

Avigilon, marketing video surveillance software, grew 72% to reach $100.4 million in revenue and a rank of 274. A March study commissioned by Avigilon found that 60% of parents prefer that their children’s schools use video surveillance over keeping doors locked at all times or employing armed guards. Mellenium Aviation in Reading, PA, used the Avigilon system to secure aircraft, lowering insurance premiums as a result.

Route1, concentrating on identity management, grew 49% to reach No. 467 with $7.2 million in revenue. In March, the company announced MobiLINK 1.0, an authentication and secure access product that enables users to securely access internal Web-enabled apps and Web resources from anywhere in the world. Route1’s customers include the U.S. Department of Defense, the Department of Homeland Security, the Department of Energy, and the Government of Canada.

McKesson Corp. leads the Healthcare business sector at No. 41 with $3.2 billion in software and services revenue, a growth of 4%. McKesson Technology Solutions is the IT provider of the healthcare services and pharmaceutical distribution company. In recent news, McKesson customer HealthTrust renewed its contract for pharmacy automation products in its 1,400 acute care facilities. McKesson also recently announced a Mobile Delivery app for Apple iPhone and iPad devices that can scan prescription labels and process credit cards.

Cerner Corp., No. 46, grew 21% to reach $2.6 billion in software and services revenue. Cerner is a healthcare IT company that calls itself one of the largest providers of electronic medical systems in the U.S., offering a range of information software, professional services, medical device integration, remote hosting, and employer health and wellness services. Cerner announced in June the Primary Health Network, which allows patients to do wellness screening with a nurse and receive tailored recommendations for becoming healthier.

MedAssets, No. 117, grew 11% to reach $640.1 million in revenue. The firm concentrates on helping healthcare organizations improve margins and cash flow through spend and clinical resource management products. More than 4,200 hospitals and 122,000 non-acute healthcare providers use the company’s products.

Athenahealth Inc., No. 142, provides physician practices with online practice management and electronic medical record services, combined with medical billing and other healthcare business services. The company grew 30.3% last year to reach $422.3 million in revenue. In a recent win, Hallmark Health System of the Boston, MA area selected the firm’s anthenaClarity cloud-based services to allow for more proactive management of its patients.

Omnicell, No. 173, offers medication and supply management software for hospitals and skilled nursing and long-term care facilities. The company grew 28% to reach $314 million in revenue. In July, ProHealth Care of WI implemented Omnicell’s G4 Unity platform of medication management systems throughout its healthcare enterprise in order to save staff time and improve medication management and inventory control.

Vertical Industry Apps
Among the leaders in the Vertical Industry Apps business sector is Itron, providing products that help utilities monitor and measure electricity, natural gas, and water. The company has some 8,000 utilities as customers in more than 100 countries. No. 56, Itron reached $2.2 billion in revenue.

Synopsys, No. 61 with $1.8 billion in revenue and a 14.4% growth rate, serves the electronic design automation and semiconductor intellectual property markets. The firm offers a portfolio of system-level, Internet protocol, manufacturing, optical, and field-programmable gate array products to assist designers in power and yield management, system-to-silicon verification, and time to results.

Solera, focused on auto insurance claims processing, grew 15.4% to reach $790.2 million in revenue and No. 102. Solera operates in 45 countries.

Guidewire Software, No. 205, grew 35% to reach $232.1 million in revenue. The company offers software to property and casualty insurance carriers. In June, the company announced products to accelerate legacy system replacement.

Sapiens International Corp., No. 262, offers products for insurance companies in property and casualty, life, pensions, and annuities. Sapiens grew 63% to reach $113.9 million in revenue.

Cover-All Technologies, No. 415, provides insurance professionals with a browser-based family of policy and claims products aimed at ensuring compliance and reducing costs. Cover-All posted $16.2 million in revenue.

Look for more coverage of Software 500 companies in upcoming issues. SW

Sep2013, Software Magazine


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