Requirements management (RM) is a fast growing area in the Federal Government market as agencies realise the importance of tracking things from business requirement to functional specification to testing to commissioning. RM involves gathering and managing user, business, technical, functional requirements, and process requirements within a product development project.
The RM solution market is unusually concentrated for the software industry. The figures vary according to source, but the market share is approximately 42% to Swedish company Telelogic with their DOORS software, 38% to IBM with their Rational RequisitePro software, with the rest of the market fighting it out for the remaining 20%.
This situation will become even more concentrated, with IBM’s US$745m (just under A$1b) bid for Telelogic. While it has support, the acquisition is yet to be ratified by the Telelogic shareholders.
As a market for RM software, Federal agencies represent between 5,000 seats/licences and 10,000 seats/licences, depending on licensing method. It is estimated that the relative market share of Telelogic and IBM is approximately 40% DOORS (Telelogic), 40% RequisitePro (IBM), and 20% the rest. In sum:
- Defence has mandated Telelogic DOORS for many of its projects, including the major HQ Joint Operations Command (HQJOC) at Bungendore
- Typically DOORS is selected by the Defence and national security organisations
- DOORS is also very highly likely for the major Access Card project
- Rational RequisitePro also has a very broad customer base in Federal agencies, particularly at the bigger end of town
80% market share to the one vendor in a growing and vibrant market is unusual in the software industry, and the acquisition of Telelogic by IBM is generally seen by industry analysts as a very smart move, strengthening the value of IBM’s previous multi-billion dollar acquisition of Rational, and adding a large number of clients and contracts to the Rational business unit within IBM. It is not clear whether there are plans to eventually integrate the solutions. They will almost definitely be maintained as separate products and offerings in the short-term to medium-term.