King IBM still dwarfs pretenders
Microsoft has been called the world's largest software company so often that we have all begun to believe it.
Microsoft seems huge. Last year, it made US$11.36 billion. Wall Street loves it - the company is worth more than $170 billion, second only to General Electric.
But Bill Gates likes to promote the small image. 'Well, the companies we compete with are virtually all larger than us,' he said two years ago, after monopoly claims were levelled against him. 'So we are kind of small.' Mr Gates is right, if you consider that he likes to see his competition as industrial giants and publishing empires.
Nevertheless, Microsoft is not the largest software company in the world, though it's a close second.
Let's sort out the pretenders from the contenders: Symantec: If you own a PC, you're probably running Symantec software without realising it. Like Pacman, Symantec has gobbled up many smaller firms and their products, like Delrina (WinFax Pro), Peter Norton Computing (Norton Utilities), and Dynamic Microprocessor International (pcANYWHERE). But even so, Symantec only sold $445.4 million of software.
Adobe: With Photoshop, PageMaker, and Illustrator - the holy trinity of Macintosh graphics and imaging software - Adobe owns the desktop publishing industry. As desktop publishing turns into Web publishing, Adobe is trying to maintain its lead. However, it is still too dependent upon Apple's success. Adobe's revenues for 1996 were $786.6 million.
SAP: The biggest company you have never heard of. SAP was founded 25 years ago by five renegade IBM employees, no doubt fed up with wearing dark blue suits to work every day. Today, the German company makes software for R/3 mainframe computers, though it recently branched out into the Year 2000 field and the Internet. Ho hum stuff, but SAP still pulled in $2.07 billion in 1996.
Computer Associates: This US company's speciality is 'mission critical business software', which says everything and nothing. Still, CA earned $4 billion last year, competing with the likes of SAP and other mainframe software vendors. CA has increased its revenues partly by buying a bunch of companies in the last two years.
Oracle: Larry Ellison's databases are the most popular way of storing and finding data. His firm made $5.7 billion last year, although only about half came from software sales and licensing. The rest came from consulting and technical support. Still, Oracle has no presence in the PC market. And any software genre with horrible acronyms like RDBMS and SQL couldn't be that big, could it? So who's left? IBM, that's who. 'No one appreciates that IBM is the largest software company in the world,' said one US analyst.
'They are in the database business, the transaction processing business, the middleware business, etc.' IBM's software division earned $12.4 billion in revenue. And with a total of $75.9 billion in revenue, IBM is six times larger than Microsoft.
On the consumer side, IBM has Lotus offering decent productivity and Web software.
But it is in the mainframe and corporate areas where IBM pulls in most of its software revenue.
Microsoft could hit $32 billion in sales by 2002, but IBM revenues from distributed software grew 26 per cent last year.
Forget OS/2 - IBM is still the king.
