Application Performance Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Application Performance Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Global Application Performance Management Market is expected to register a CAGR of 12% over the forecast period. The market is shifting from on-premises deployment in large organizations to on-cloud due to the changing application usage, increasing awareness among smaller enterprises, and the demand for cost-effective systems.

Key Highlights

• The monetary transaction applications in the BFSI industry have been incorporating APM (application performance management) systems at a robust pace due to the need for real-time processing and reducing mid-transaction failure chances.
• APM helps in Application discovery and dependency mapping (ADDM) that discovers and categorizes all applications and servers, alerting and automizing threat actions. It provides a custom dashboard and eases reporting. Also, application management software tools come for less price for deployment and have significant opportunities for scalability.
• Many organizations are rapidly adopting predictive maintenance and cloud computing owing to a rise in demand for APM. For instance, AppDynamics, with its expertise, played a pivotal role in the complex market for hybrid and multi-cloud, helping Cisco, its parent, to monitor performance at the application level by adapting to digital business needs by providing common tools across the technology stack.
• The integrational and functional issues with generic solutions have challenged their widespread acceptance, and the demand for client-specific, tailored solutions is still high. The market studied is primarily dependent on two factors, i.e., performance output at the user's end (in terms of response time) and peak load handling, which have led to its essential incorporation in public-facing services, such as social media as well as media and entertainment applications.
• With the recent outbreak of COVID-19, the application performance management market is expected to gain significant share due to increased demand, both inpatient needs and IT connectivity, or even network bandwidth. For many businesses, applications and services are the only potentials for revenue right now, with the shutdown of stores and events. Thus, application performance management solutions play a pivotal role in this pandemic hour.

Key Market TrendsAdoption in Large Enterprises to Drive Market Growth

• The direct software solutions are appealing to large organizations which have the capabilities of hosting these systems on their own, on a large scale. Enhanced security and control over data drive this demand. Further, APM systems that are directly sold as software solutions can be tailored specifically to client needs, with close integration of the application that must be managed. This not only allows analytics improvement and management but also provides higher capabilities due to complete access to parameters.
• In addition, the improving capabilities of hybrid clouds are facilitating the incorporation of APM systems into large enterprises, thus resulting in the on-premises deployment of software solutions, with extension to public clouds. The software solutions in APM systems are quickly shifting toward unified models, which have the capability of simultaneous analysis of performance, business, and user experience.
• This shift in trend is driven by the close relationship and interdependence between the separate segments. For instance, the performance of applications affects user experience, while business analysis might help to determine peak times or exit points. The holistic approach toward application performance management systems has increased the functionalities manifold and thus provided a major boost to the market studied.
• Application performance management offers various advantages, such as being supported by a wide range of applications (for example - application performance management tools may help monitor an organizational webserver). It also helps in Applications Discovery and Dependency Mapping (ADDM), discovers, and categorizes all applications and servers, alerting and automizes threat actions. It provides a custom dashboard and eases reporting. Also, application management software tools come for less price for deployment and have significant opportunities for scalability.
• When properly deployed, the APM tools provide deep visibility into the customer experience when customers interact with a company on a technical plane, offering a unique opportunity for organizations to align their tech performance with their objectives better. The increasing need for improving customer experience is expected to propel market growth.

Europe to Hold Significant Market Share

• APM Service providers in the Central Europe region are actively participating in mergers & acquisitions to contribute to market growth. For instance, Sentia, the Netherlands-based Azure Expert MSP, has acquired Dutch-Danish MSP Ymir, intending to become the market leader in the European Managed Services for complex and business-critical cloud applications. Ymor, on the other hand, is regarded as an application performance specialist, actively engaged in partnerships with ExtraHop, AppDynamics, and Dynatrace, among others.
• Across the European region, many governments are moving IT services to the cloud to enhance efficiency and reduce costs. By replacing isolated and aging legacy systems with centralized shared services, government organizations can focus their IT resources on core business, strengthen data security, and focus on human resources as their primary objectives.
• To address such high cloud adoption, companies such as Amazon offer S3 cloud storage classes for data archiving and application hosting. Moreover, lesser cost enables the SMEs in the region to opt for such solutions. The increasing adoption of data centers and web servers to host applications has increased the demand for application performance management in the European market.
• In addition, Raiffeisen Switzerland is in the process of building a digital workplace environment that leads to improved customer advisory services and increased efficiencies. It is the third-largest bank in Switzerland, has 1.9 million cooperative members, 880 locations, and 3.8 million clients throughout Switzerland.
• APM vendors in the Europe region have started to express interest in their solutions being considered as an AIOps tool. IT operations and other organizations are already loaded with data, and this situation is likely to become more challenging with the growth of microservices, the cloud, and the Internet of Things (IoT).

Competitive Landscape

The Application Performance Management market is moderately competitive. Major players include New Relic Inc., Dynatrace LLC, and IBM Corp., among others. A few recent developments are:

• January 2022 - Kong Inc., a cloud connectivity company, announced the availability of Kong Enterprise 2.7, a cloud-native service connectivity platform that enables companies to efficiently and reliably manage APIs and microservices at scale across any underlying architecture.
• June 2021 - Netreo, a provider of IT infrastructure and application performance monitoring solutions, has formed a formal partnership with Silxo, a systems integrator specializing in digital and business transformation services in highly regulated industries. Silxo is situated in London, and the agreement may enable Netreo to expand its presence in the United Kingdom by developing a top-tier channel partner that will provide strategic business services geared to C-level executives. Silxo may offer Netreo’s advanced on-premises, cloud, and hybrid infrastructure management, application performance management, and code profiling solutions due to this partnership.
• April 2021 - IBM announced a definitive agreement to acquire Turbonomic, an Application Resource Management (ARM) and Network Performance Management (NPM) software provider based in Boston, MA.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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