ARC Advisory Group tracks the enterprise software market on a quarterly basis. We track the revenues of fifteen prominent publicly traded enterprise software companies and translate financial results reported in foreign currencies to US dollars using an average exchange rate for the given reporting period. The suppliers’ reporting period for this analysis is the quarter ended September 30, 2015 unless stated otherwise.
The suppliers included in this report recorded combined quarterly revenue of $21.9 billion, representing a decline of 5.1 percent year-over-year. The year-over-year change in supplier revenues ranged from a decline of 15 percent to growth of 18 percent. It is noteworthy that eleven out of fifteen companies reported year-over-year revenue decline during the quarter. The strengthening US dollar is the prominent factor behind the declines. The euro declined 16.2 percent, Swedish krona by 18.1 percent, and British pound sterling by 7.2 percent compared to the US dollar. The downward trend in on-premise software revenues is another major reason for declining revenues. In contrast, cloud and subscription revenues continue to grow. This business model change negatively impacts revenue recognition at the outset and requires multiple periods to reach break-even levels of revenue recognition.
The chart below lists 15 prominent suppliers and their related financial metrics. The percentage figures mentioned in the research and development (R&D) expense column are a factor of total company revenues and not necessarily reflective of the enterprise software revenues listed and discussed in the report.
The enterprise software market experienced moderate and stable growth rates from 2013 until the end of last year. Since then, market revenues have declined in line with the strengthening of the US dollar with respect to major foreign currencies.
The following chart displays the year-over-year change in the value of the euro with respect to the US dollar and its comparison with the change in market revenues suggests the major impact of currencies on the market’s recent revenue decline.
This is a brief synopsis of a quarterly report ARC publishes after all the companies on the list release their revenues. If you would like a complete copy of this analysis, including the results of the fifteen enterprise software companies covered, please contact firstname.lastname@example.org.