Sandhill.com is running a good podcast regarding predictions for the software industry for 2006. Analysts M.R. Rangaswami, Erik Keller, and Vinnie Mirchandani provide the forecast. I'll summarize a few of the items that I think are right on the money:
Rangaswami believes that software as a service (or, software on-demand) will continue to thrive in 2006, although providers need to address service problems such as the recent outages at Salesforce.com. Kellerl points out, however, that buyers need to distinguish between software as a service as a license strategy (subscription pricing) and as a delivery strategy (hosted applications). He rightly points out that some vendors of on-premise software (e.g. SAS) have offered subscription pricing for years.
Erik Keller thinks that there will NOT be a big push to service-oriented architecture (SOA) anytime soon. He says, "The industry is not going to go off and spend a half-trillion dollars and make this upgrade in the next couple of years. No major vendor has given their customers a good reason to do the upgrade other than this techno-flash-babble about SOA being more flexible and more wonderful."
Keller also thinks that both Oracle and SAP are going to have a hard time meeting the growth expectations of Wall Street, primarily because customers do not have the maintenance budgets that these vendors need to grow. There's also concern about both vendors pushing customers into major upgrades that they just won't have the money for.
Mirchandani thinks that industry will finally be getting some relief from the tremendous burden of Sarbanes-Oxley (SOX) compliance. Corporate lobbying of Congress will finally result in some relaxing of the rules. The compliance burden is a hidden tax on U.S. companies that overseas providers do not have to pay.
You can listen to the whole podcast (about 35 minutes) for free at http://sandhill.com/opinion/editorial.php?id=64.
Related posts
Software on demand: attacking the cost structure of business systems
High software maintenance fees and what to do about them
Sarbanes-Oxley: stop the insanity
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