Old Rules for a New Era
Software vendor success will not be determined by a specific technology or model but by meeting customer expectations.
By M.R. Rangaswami, Sand Hill Group
Apr. 26, 2008
SaaS. Cloud. SOA. Open source. Platform. Subscription. Mobile. Virtual. The innovation of software business is staggering. As vendors work to keep their products relevant and cutting edge, buyers simply struggle to stay on top of the ever-evolving landscape of software solutions.
When Software 2008 opens tomorrow in Las Vegas, hundreds of executives will gather to exchange insight about how to leverage the latest technology and business-model innovations in order to appeal to today's IT buyers. Yet rather than following a specific model, vendors would be ahead to recognize that the next era will ruled by the companies that deliver on a basic set of expectations which have long governed software buyers' needs.
The Future Looks Bright
The ten years of software industry evolution that led to today has been characterized by rampant innovation. As buyer's struggled to manage shrinking budgets, the vendor community responded with new products that took advantage of technologies like open source and services-oriented architecture (SOA) which promised savings. Other startup and established software companies adopted new business models such as software-as-a-service (SaaS) and cloud computing in order to offer customers new flexibility and improved deployment time.
The scale of change has been impressive for an industry which has not historically been known for its nimble nature or positive customer relations. And enterprises are rewarding the software industry for its innovation.
A new study of technology buyers from McKinsey & Co. and Sand Hill Group shows software will account for an increasing portion of IT budgets going forward. Despite a slowing economy, customers estimated that software represented 30 percent of IT spending in 2006 and that that figure would rise to 36 percent by 2010.
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When Software 2008 opens tomorrow in Las Vegas, hundreds of executives will gather to exchange insight about how to leverage the latest technology and business-model innovations in order to appeal to today's IT buyers. Yet rather than following a specific model, vendors would be ahead to recognize that the next era will ruled by the companies that deliver on a basic set of expectations which have long governed software buyers' needs.
The Future Looks Bright
The ten years of software industry evolution that led to today has been characterized by rampant innovation. As buyer's struggled to manage shrinking budgets, the vendor community responded with new products that took advantage of technologies like open source and services-oriented architecture (SOA) which promised savings. Other startup and established software companies adopted new business models such as software-as-a-service (SaaS) and cloud computing in order to offer customers new flexibility and improved deployment time.
The scale of change has been impressive for an industry which has not historically been known for its nimble nature or positive customer relations. And enterprises are rewarding the software industry for its innovation.
A new study of technology buyers from McKinsey & Co. and Sand Hill Group shows software will account for an increasing portion of IT budgets going forward. Despite a slowing economy, customers estimated that software represented 30 percent of IT spending in 2006 and that that figure would rise to 36 percent by 2010.
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