3 Market trends IDC analysts say will shape the APM space

October 23 2019

What do you need to consider when making an investment in APM? A new report from IDC helps IT and business leaders make sense of the rapidly changing space.


The application performance management (APM) software market has entered a new phase in its growth and development, indicating more companies are realizing that flawless application performance is essential for executing a successful digital strategy and, ultimately, protecting a company’s bottom line.

According to a newly released IDC report, Worldwide Application Performance Management Software Market Shares, 2018, the worldwide APM software market grew by an extraordinary 13.4% between 2017 and 2018, with annual revenue now totaling $4.3 billion.

Download the full IDC report here

And while we’re proud to say the report also reveals that AppDynamics is the largest and fastest-growing APM technology provider, taking the top spot with a market share of 11.2%, the report tells a larger, more important story about the evolving APM software market and how you can leverage key trends to guide your APM investment strategy.

APM Is Now Business-Critical

In the modern enterprise, application performance issues are more than just an IT headache. In fact, performance issues have the potential to jeopardize customer loyalty, brand reputation, and profitability. After all, a mere 1-second delay in page load time results in 11% fewer page views, a 16% decrease in customer satisfaction, and a 7% loss in conversions. With so much riding on application performance, it makes sense why IT leaders are increasingly turning to APM technology to deliver the ideal digital experience to every user at all times.

As Stephen Elliot of IDC adds, “Growth in APM is being driven by the need to manage application performance throughout the application life cycle from DevOps to production operations to ensure that end-user experience meets competitive quality standards. End-user satisfaction with application performance and reliability is critical for successful digital business operations.”

And while the APM market landscape is filled with countless tools, not all are comprehensive solutions. Choosing the right solution for your organization — one that takes into account current and future trends — is the key to getting the most out of your investment in the long term.

Looking Ahead: Three Market Trends to Consider

Based on IDC’s market analysis, there are three significant trends and developments every organization should consider when making an APM investment:

#1 – Using a modern solution with a SaaS delivery model has its advantages for DevOps and cloud-based applications.

Today, 70% of CIOs have a “cloud-first” IT strategy, and by 2020 two-thirds of IT spending will be for cloud-based offerings. Enterprises are increasingly shifting to the cloud to improve scalability and lower costs, and this can certainly be seen within the APM software market.

While APM technology continues to be delivered in a mixture of public cloud SaaS and on-premises solutions, roughly one in four deployments is now delivered via the public cloud.

As IDC notes, “The inherent on-demand scalability and global reach of SaaS, as well as the increasingly powerful big data analytics and AI support provided by highly scalable SaaS solutions, make them a great match for DevOps and cloud-based applications.”

So, while the on-premise and SaaS approaches to APM each have their own strengths, the rapid deployment and simplified management of cloud-based APM may provide your organization the shortest path to value.

#2 – Enterprises need real-time, actionable insights into IT operations in order to achieve specific business outcomes.

“The notion of real-time data collection and analysis is rising and increasingly important for enterprise IT customers that are shifting more container and microservice-based workloads toward the public cloud infrastructures and PaaS models,” according to IDC.

Connecting application performance to business performance is the ultimate goal for any enterprise. But today, this connection is usually disjointed. To bridge this visibility gap, leveraging APM software that can offer immediate, clear, actionable correlations between application performance, user experience, and business outcomes is key.

It’s why, IDC expects, “Big data analytics will increasingly be paired with APM to provide developers, IT operations, and business analysts with important and actionable insights.”

#3 – Containers and microservices require a different approach to performance monitoring.

While containers and microservices are now mainstream, they also make the enterprise IT stack more complex—and more difficult to monitor. It’s why IDC suggests APM technology vendors will need to provide robust support for container and microservices-based applications in order to stay competitive in the coming years.

“Enterprise customers are pursuing strategies to containerize both existing and new cloud-native workloads to improve multicloud portability and enable more efficient utilization of VMs. To remain relevant, APM solutions must be able to monitor, analyze, and detect the root cause for applications deployed on ephemeral containers as well as deployed on more traditional stateful hosts,” the report notes.

Given the rising popularity of containers and microservices, organizations should look for an APM solution that can provide full visibility into every component of the enterprise stack—including containers and microservices.

Future-Proofing Your APM Investment

Today’s increasingly complex and distributed IT environments require a modern, robust APM solution to optimize business performance — and the market agrees.

With a deep understanding of the current state of the APM technology space—as well as what vendor and technology trends are expected to shape the future of it—you can choose an APM solution that will best support your digital transformation strategy, now and into the future.

Want more expert insights to help you navigate the APM technology landscape? Download IDC’s full report here.

Sonja Jacob
Sonja Jacob is Global Content Marketing Lead at AppDynamics. She writes about emerging trends at the intersection of technology, software, and people.

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