The worldwide enterprise software market made a rebound in 2010, according to figures released by Gartner.  The analyst firm reported that total software revenue increased 8.5 percent annually to a worldwide market size of $245 billion, as compared to the doldrums of 2009, when worldwide revenue declined 2.5 percent to $226 billion.Major software vendors expanded their product portfolios, acquired companies and reached deeper into emerging markets, according to Joanne Correia, managing vice president at Gartner.

“The year represented a return to solid footing as the market recovered and expanded in terms of revenue and geographies,” Correia said.

But not all regions recovered as rapidly as others, she added.

“Japan and Western Europe saw relatively modest dollar-denominated growth, while Latin America and Asia/Pacific saw growth in the mid-to-high teens, nearly double the market average,” Correia explained.

Gartner analysts said that three of the top five vendors experienced revenue gains above the industry average, with Microsoft maintained the lead in the No. 1 spot as it increased its worldwide enterprise software revenue market share to 22.4 percent, in 2010. 

IBM, which sells only to enterprises and partners, maintained its No. 2 ranking in 2010 as it had in 2009, and it would be the No. 1 enterprise software vendor if Gartner did not count consumer sales of Microsoft's office and operating systems, analysts said.

Oracle showed the strongest growth among the top five vendors, increasing revenue by 19.4 percent. VMware led the group of top 25 vendors, with more than 41 percent growth in 2010, followed by Adobe with more than 29 percent and salesforce.com with more than 28 percent growth.

Meanwhile, SAP showed a 13.9 percent growth in revenue and Symantec’s increased by 2.6 percent.

Mergers and acquisitions are projected to continue as companies seek to expand their overall market presence, according to Tom Eid, research vice president at Gartner.

“The enterprise software vendor landscape continues to change,” Eid said. “Mergers and acquisitions are expected to continue as vendors and service providers look to expand their customer bases, add unique features aligned to a vertical-market or technology function, and improve overall market presence.”