Software Industry at a
           Crossroad.
   What’s next for the
   Software Industry?




                         1
A...
In these difficult
and uncertain
times the CEO is
focused on




                         2
ways to reduce
costs.
        ...
IT budgets
will also be
cut.




                   3
Potentially
20% to 35%.
               3
Do More
For Less




                    4
Is the mantra
  across the
 organization
                4
What will
the CIO
  do?




                5
            5
Squeeze vendors …
                    6
… and will handover
the entire IT to a
vendor with a pay-
per-use model
to reduce the
total cost of IT
ownership.         ...
Welcome to
Software As A Service

This is not about
technology but a business




                                8
impera...
To provide Software As a
Service, vendors will demand:
-- long-term commitments
-- more control over how
   the environmen...
To provide this service at
the price point being
demanded, vendors must
build Virtual Private
Clouds that span legacy
appl...
Enterprise Virtual
Private Cloud will be
    Private, secure and firewalled
    Some components on premise and




     ...
Infrastructure for Virtual Private
Clouds must be super
efficient.
Must support:




                                     ...
manage relationships with
enterprises and ensure
continuity of business processes
including legacy systems.




          ...
own, create and manage high
performance cloud
environments.




                                      14
    manage relati...
manage relationships with
enterprises and ensure
continuity of business processes
including legacy systems.




          ...
System Integrators who
understand enterprise
processes with significant wallet
share and good relationships
with CIOs are ...
Who could be a Cloud Operator?




                                  17
                             17
Three Level Eco-System
    CIO – the ultimate buyer of IT.




                                           18
       Virtua...
Enterprise Data will be
  an integral part of the
  Virtual Private Cloud*




                                           ...
The Cloud Operator
and the Virtual
Private Cloud
Operator are not
ready to provide




                          20
the se...
How do we get there?




                            21
          Who pays for it?
                       21
What’s the future
for software
product vendors?




                     22
                22
Software Vendors can be classified as
• Infrastructure software providers.
  They provide software that is part
  of the c...
24
Infrastructure Software Vendors
have a very small number of
cloud operators to sell their
products to.                 ...
Since data is part
of the cloud
infrastructure
and a not part of
the application,




                          25
replace...
Who will buy
Application Software?
       CIO: Directly for
         the Enterprise




                                26...
In both scenarios the Application Software
Vendors have limited lock-in for their
products.
Application Software must be b...
This spells the
death of the
custom




                       28
Application
Development
Business.
                  28
The economics of the
new software industry
will be very different.
Vendors will provide
software with regular




        ...
With this model, we may expect the
following changes to the life of the
software vendors:
                   The  need to...
The market will
change very
fast. CEOs want
to cut cost now!




                        31
Once the
change
begins, it wil...
Software vendors must invest
now to be ready for this new
world or become extinct.




                               32
33
Persistent: your trusted
partner to help you get
      there now!
                           33
We welcome your comments:

  Anand Deshpande (anand@persistent.co.in)
  Ashok Korwar (ashok_korwar@persistent.co.in)

  Pe...
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The Emerging Landscape Of The Software Industry Presentation (June)

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A view on the future of the software industry in the context of difficult market conditions.

Difficult market -> outsourced IT -> software as a service -> need to implement cloud.

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The Emerging Landscape Of The Software Industry Presentation (June)

  1. 1. Software Industry at a Crossroad. What’s next for the Software Industry? 1 Anand Deshpande and Ashok Korwar Persistent Systems June 2009 1
  2. 2. In these difficult and uncertain times the CEO is focused on 2 ways to reduce costs. 2
  3. 3. IT budgets will also be cut. 3 Potentially 20% to 35%. 3
  4. 4. Do More For Less 4 Is the mantra across the organization 4
  5. 5. What will the CIO do? 5 5
  6. 6. Squeeze vendors … 6
  7. 7. … and will handover the entire IT to a vendor with a pay- per-use model to reduce the total cost of IT ownership. 7
  8. 8. Welcome to Software As A Service This is not about technology but a business 8 imperative. Buyers will force the adoption of Software as a Service even before the infrastructure is ready. 8
  9. 9. To provide Software As a Service, vendors will demand: -- long-term commitments -- more control over how the environment will be 9 managed. … and at the right price they will get it. 9
  10. 10. To provide this service at the price point being demanded, vendors must build Virtual Private Clouds that span legacy applications and new technology and are deployed on premise and in the cloud. 10
  11. 11. Enterprise Virtual Private Cloud will be  Private, secure and firewalled  Some components on premise and 11 others will be distributed across the cloud.  Centrally managed  One fine-grained pay-per-use bill 11
  12. 12. Infrastructure for Virtual Private Clouds must be super efficient. Must support: 12  Multi-tenancy  Virtualization  Security  Remote Monitoring  Handle Legacy Applications 12
  13. 13. manage relationships with enterprises and ensure continuity of business processes including legacy systems. 13 own, create and manage high performance cloud environments. 13
  14. 14. own, create and manage high performance cloud environments. 14 manage relationships with enterprises and ensure continuity of business processes including legacy systems. 14
  15. 15. manage relationships with enterprises and ensure continuity of business processes including legacy systems. 15 own, create and manage high performance cloud environments. 15
  16. 16. System Integrators who understand enterprise processes with significant wallet share and good relationships with CIOs are candidate Virtual 16 Private Cloud Operators 16
  17. 17. Who could be a Cloud Operator? 17 17
  18. 18. Three Level Eco-System CIO – the ultimate buyer of IT. 18 Virtual Private Cloud Operators Cloud Operators 18
  19. 19. Enterprise Data will be an integral part of the Virtual Private Cloud* 19 * And not part of the application. Data Integration challenges will force CIOs to accept standardization of data, processes and the application 19
  20. 20. The Cloud Operator and the Virtual Private Cloud Operator are not ready to provide 20 the service at the price that the Enterprises are demanding today. 20
  21. 21. How do we get there? 21 Who pays for it? 21
  22. 22. What’s the future for software product vendors? 22 22
  23. 23. Software Vendors can be classified as • Infrastructure software providers. They provide software that is part of the cloud infrastructure. • Application software providers. 23 They provide software that runs on the cloud. 23
  24. 24. 24 Infrastructure Software Vendors have a very small number of cloud operators to sell their products to. 24
  25. 25. Since data is part of the cloud infrastructure and a not part of the application, 25 replacement of software components will be easier. 25
  26. 26. Who will buy Application Software? CIO: Directly for the Enterprise 26 or Virtual Private Cloud Operator 26
  27. 27. In both scenarios the Application Software Vendors have limited lock-in for their products. Application Software must be built • Quickly 27 • Upgraded continuously • Have new features otherwise be replaced • Componentization and Service Oriented Architectures will be standard design philosophies. 27
  28. 28. This spells the death of the custom 28 Application Development Business. 28
  29. 29. The economics of the new software industry will be very different. Vendors will provide software with regular 29 (monthly) payments being made depending on how the product is used. 29
  30. 30. With this model, we may expect the following changes to the life of the software vendors:  The need to deploy faster  The need to upgrade 30 frequently – if you cannot, you run the risk of getting replaced  Operate at a lower cost base 30
  31. 31. The market will change very fast. CEOs want to cut cost now! 31 Once the change begins, it will become a 31
  32. 32. Software vendors must invest now to be ready for this new world or become extinct. 32
  33. 33. 33 Persistent: your trusted partner to help you get there now! 33
  34. 34. We welcome your comments: Anand Deshpande (anand@persistent.co.in) Ashok Korwar (ashok_korwar@persistent.co.in) Persistent Systems April 2009 34

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