Tim has asked me to take over writing the quarterly report on the state of the computer book market.
As described in the post Computer Book Sales as a Technology Trend Indicator, our research group has built a MySQL datamart containing Bookscan‘s weekly top 10,000 titles sold. Bookscan measures actual cash register sales in bookstores to you, the individuals purchasing and reading the books. Retailers such as Borders, Barnes & Noble, and Amazon make up the lion’s share of these sales.
Book Market Performance
Here’s the year-on-year trend for the entire computer book market since 2003, when we first obtained the data from Bookscan.
As you can see, the clear seasonal pattern we’ve pointed out before still exists. The trend line for each year closely mirrors the year before, with remarkably consistent weekly ups and downs. (The computer book market cratered in 2001, shrinking twenty percent a year for three years until it stabilized in 2004 at about half the size that it was in 2000. We only have data going back to 2003. If we had pre-dotcom bust data, it would all be, to borrow a saying from Al Gore, “off-the-charts.”) 2005 saw a slight upturn from what we viewed as the bottom of the market in 2004. 2006 got off to an even stronger start, and it looked as though we were recovering from the post-dotcom-bust slump. But by the second quarter of last year, we’d reverted to the norm for the past three years.
In the first quarter of 2006, new interest in web development associated with Web 2.0 and strong performance of books on digital media applications like Photoshop helped to drive the market. In the first quarter of 2007, we hoped that the Microsoft Vista and Office 2007 releases would cause a similar sharp increase in our trend lines. That has not materialized, and in fact, you could say that Microsoft’s new releases have not lived up to expectations yet, at least for book sales. I did say “yet” because there are signs that Vista is starting to pick up steam. But the fact is that without a significant bump from Vista and related Office products, the 2007 market has not performed at the 2006 level. I find it very interesting that the web and digital media had more of a market effect in 2006 than a huge, highly anticipated release of a new version of the world’s most used consumer operating system and its office productivity suite has in 2007. It’s one more sign of the waning of Microsoft’s once fearsome market power.
In order to see what is spiking and deflating the trend line above, we use our Treemap visualization tool. This tool helps us pick up on trends quickly, even when looking at thousands of books. It works like this.
The size of a square shows the market share and relative-size of a category, while the color shows the rate of change. Red is down, and green is up, with the intensity of the color representing the magnitude of the change. A new category like Vista, which did not exist last year and hence can’t be compared, shows up as black. The following screenshot of our treemap shows gains and losses by category, comparing the first quarter of 2007 with the first quarter of 2006.
1st Quarter 2007 vs. 1st Quarter 2006
Click the image to get a larger view.
So what are all the boxes and colors telling us? The fact that there are far more red boxes than green tells us that the market slump is broad-based, and that new categories like Vista and Office 2007 aren’t enough to offset the overall market decline. If you compare this graphic with the one in Tim’s post from the first quarter last year, it is quite noticeable that there are fewer green boxes and the green bright spots are smaller than last year.
It’s probably not entirely fair to pick on Vista — Windows book sales are up 21% over the year before, and Vista titles have taken over all the bestseller slots. But Office 2007 has definitely been a non-factor. While the Office category per se (books on the entire suite) shows 39% growth year over year, Excel and Word books are down 7%, with Powerpoint, Outlook, and Project books even further in the red, leaving the entire office applications category down 21%.
And of course, with both Mac OS X and the Adobe suites (now including Macromedia) down while they await new software releases, there’s not a lot of support from the digital media end of the market.
As a result, we have to look elsewhere for signs of strength. In the business applications group, we see Sharepoint continuing its importance, and Quickbooks becoming a staple growth area. We also see some first signs of CRM heating up as a publishing area.
In the Web design and development area, it’s worth noting that Ruby on Rails has continued its blazing growth, but Ajax books have not. The decline of both PHP and ASP are striking. Flash and Dreamweaver are also down, but as noted above, awaiting the CS3 release. Flex is starting to show its muscle.
Turning to the software development space, Agile is a category that is growing and one to watch. It wasn’t too long ago that the dominant software development subjects were UML and Extreme Programming. Those barely show up any more although Extreme Programming was, loosely speaking, a precursor to Agile. Something worth looking at is the size of the boxes and those changes.
Remember, the size of the box represents the size of the market in relation to all items on the treemap. Rails in the bottom middle was a small speck in last year’s first quarter post. Now the size of the box fits the size of its name at least. And its market share is almost equal to SQL and has surpassed VBA, Perl and Python. Python is also experiencing good growth, just not at the blazing velocity of Ruby. I would expect by next year, we will see Ruby have an even larger share/square.
On the Microsoft side, we see a large increase in the category of .Net programming. We really need to re-do this category, as .Net has been deprecated as a term, and this group includes several distinct technologies that need categories of their own. The topics driving the growth in this category include the MCTS certification, WPF, and WCF.
As noted above, Photoshop and related Adobe products are declining as everyone awaits CS3’s release. The interesting thing with this market is that it pretty much is a one-for-one replacement type of thing. Most professional artists who make money by using these tools need to replace them to keep competitive. We’ll watch this and report back in the coming quarters. I expect this to be a huge growth category by the end of 2007.
A useful way to organize the trends is to identify areas that are High Growth Categories [Bright Green], Moderate Growth Categories [Dark Green to Black], Categories to Watch [all colors], and Down Categories [Red to Bright Red]. Most of these descriptions are self-explanatory except perhaps the Categories to Watch. Categories to Watch contains titles that are typically not susceptible to seasonal swings. Subjects that fit into our Computer and Society segment are included here as well as other subjects that are not typically related to a release cycle. Categories to Watch also include stalwarts like Excel [even though it is susceptible to revisions] that sell, and sell and sell. Photoshop is also in this category as we are watching the effect of a looming new release and what is happening to the existing books in the category. To me, the watch list is a bit subjective and more of an intuitive view than a dogmatic view.
The table below highlights and explains some of the data from the chart above. The Share column shows the total market share of that category, and the ROC column shows the Rate of Change. So, for example, you can see that Windows Desktop OS books represent 9% of the entire computer book market, and were up 20%.
|High Growth – Hot Topics
|Vista Release; Vista expectations not yet met
|Office 2007 Release; continued sales of previous versions still selling at 80% of Office 2007
|“Web Usability” titles are driving this.
|New MCTS certificate; interest in MS dev tools
|Ruby on Rails (RoR) + Python driving the category
|Web 2.0, Ajax and RoR contributing to growth
|SQL Server & services (reporting, analysis, integration) leading category
|Categories to Watch
|Book market anticipating new version release
|Computers & Society
|Not a “need to have” category. Should rebound with books like Myths of Innovation
|Down now but should increase because of Office 2007 release.
|Down Categories – Not Hot Topics
|Active Server Pages
|JSP and ASP both down — RoR likely cause.
|Most books geared towards sys admin security, nothing is really new in category.
|Diverse topic, Make Magazine skews the numbers as more buyers now subscribe
Part two of this series will give a closer look at the technologies within the categories. Part three will be about the Publishers, winners and losers. And part four will be some more analysis of Programming Languages.