Emerging trends in the Software Industry

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The presentation is a slimmed down version of a presentation I'm delivering to a group of large financial investment executives. I take a look at the trends that are emerging out of the impact of the last two years of economic crisis and start to paint a picture of what I believe the software industry will look like going forward.

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Emerging trends in the Software Industry

  1. 1. Michael Fauscette, Group Vice President, SBS ©Copyright 2008 IDC 2009 IDC 7-09
  2. 2. Where We Stand WW IT Spending Worldwide GDP Forecast © 2009 IDC Source: Q2 & Q3 2008 Worldwide Black Books; IDC Downside Scenario Model 7-09 2
  3. 3. Applications Forecast Changes 8.0% 7.0% 6.0% 5.0% 2008 (Early) 4.0% 2008 (Dec) 2009 (Jan) 3.0% 2009 (May) 2.0% 1.0% 0.0% 2008 2009 2010 2011 2012 ©Copyright 2009 IDC. Reproduction is forbidden unless authorized. All rights reserved. 2009 IDC 7-09
  4. 4. An Economic Unknown $1-3 Trillion For  Bank Bailouts  Tax Cuts  Smart Grid  SMB Incentives  Health Care  Infrastructure  Broadband  Auto Manufacturers  Green Building © 2009 IDC 7-09 4
  5. 5. Software Megatrends Structural Changes Accelerated by the Financial Crisis Consumption Models Architecture Imperatives Emerging Targets Sourcing a Process © 2009 IDC 7-09
  6. 6. Software Megatrends Structural Changes Accelerated by the Financial Crisis Consumption Models   Software as a Service / Cloud Applications   Open Source Software © 2009 IDC 7-09
  7. 7. SaaS forecast comparison $M • IDC has increased its SaaS growth projection for 2009 from 36% growth to 42% growth over 2008. • The percentage of U.S. firms which plan to spend at least 25% of their IT budgets on SaaS applications will increase from 23% in 2008 to nearly 45% in 2010. Source: Economic Crisis Response: Worldwide Software as a Service Forecast Update (IDC #215504, January 2009) ©Copyright 2009 IDC. Reproduction is forbidden unless authorized. All rights reserved. 2009 IDC 7-09
  8. 8. OSS Forecast Source: Worldwide Open Source Software Forecast 2009 – 2013, July 2009 © 2009 IDC 7-09
  9. 9. Software Megatrends Structural Changes Accelerated by the Financial Crisis Imperatives Emerging   Social Software Solutions © 2009 IDC 7-09
  10. 10. The Social Enterprise Democratization and Empowerment: Spreading control across a broad audience, adding value, building relationships, conversations and increasing transparency It’s not just “tools”, it’s changing processes and culture © 2009 IDC 7-09
  11. 11. The Social Enterprise External Sales – Marketing – Product – Support - Service Blogs – Communities – Social Networks - Ideasourcing – Microblogs – Syndication – Virtual Conference - Video Wiki’s – Social Analytics – Collaboration – Mashups – Platforms - Internal © 2009 IDC 7-09
  12. 12. Social Software Solutions Consumer Apps Collab CRM Content Apps Online Community Platforms Social Analytics Ideasourcing Enablers Wiki Social Wiki Customer Blogs Service Blogs +traditional Social SFA Ideasourcing Collab (predictive selling) Brand Monitoring / building © 2009 IDC 7-09
  13. 13. Social Software Solutions Vendors Consumer Apps Collab CRM Content Apps Online Community Platforms Social Analytics Facebook SocialText Concursive Google Apps LinkedIn Lotus UserVoice Cisco Eos Connections Oracle Sales Reality Digital MySpace Sharepoint Prospector MyLife Twitter Jive Bright Idea OneRiot Google Google Apps Omniture Wink Apps © 2009 IDC 7-09
  14. 14. Software Megatrends Structural Changes Accelerated by the Financial Crisis   Service Oriented Architecture Architecture (SOA)   Event Based Architecture   Unified Access to Content and Data © 2009 IDC 7-09
  15. 15. Software Megatrends Structural Changes Accelerated by the Financial Crisis   Build: Mashup, Process Modeling, Business Rules   Buy: “Good Enough” v. “Best of Breed”   Outsource Sourcing a Process © 2009 IDC 7-09
  16. 16. Software Megatrends Structural Changes Accelerated by the Financial Crisis Targets   SMB’s   Channels   Partner to Partner © 2009 IDC 7-09
  17. 17. Consolidation   Enter the Mega-ecosystem   Partners Coalesce Around Epicenters   Partner Consolidation   Hybrid Business Models © 2009 IDC 7-09
  18. 18. The New Landscape of Tech Mega HP, IBM, Microsoft, Oracle (Post Sun), Vendor Cisco, Intel, Google, Apple Acquisition 1. Large >$1B, 2. vertical ISV’s, 3. Targets Discontinuous innovators Niche Markets, Redundant Portfolio, Too Survivors Unique Discontinuous Innovators: future Start ups acquisition targets © 2009 IDC 7-09
  19. 19. Oracle : Sun Key Sun Assets:  Java  Solaris  Storage Key Opportunities:  Appliances  Storage  Open Source © 2009 IDC 7-09
  20. 20. Enterprise Apps Deals Database Enterprise Applications Deals Database: track, analyze, & summarize the buying behavior of enterprise applications deals around the world. IDC is the only research firm tracking these deals.  4,000-5,000 deals tracked annually  Leading indicator for future purchasing Provides an understanding of  What was purchased? Types of buyers? Which segments?  Why was it purchased?  What is happening in the field? IDC is also planning to expand our software deal tracking across additional market areas in 2010. IDC clients are eager to understand tactical buyer data that can be used in upcoming deals. © 2009 IDC 7-09
  21. 21. Segmentations  Buyer  Vendor  Partner  23 Enterprise Applications Markets (ERM, SCM, CRM, Ops & Mfg, Engineering)  Product  8 Verticals  Employee Size  3 Regions (Americas, Asia Pacific, EMEA)  Net New Customer vs Installed Base  Announcement Date © 2009 IDC 7-09
  22. 22. Sample Analysis From EA Deals DB SMBs remain steady buyers Base: 4004 purchases SMB = Enterprises With Fewer Than 5,000 Employees Large = Enterprises With More Than 5,000 Employees © 2009 IDC 7-09 22
  23. 23. Sample Analysis From EA Deals DB (Cont.) Net new customers become scarce Base: 4004 purchases © 2009 IDC 7-09 23
  24. 24. Sample Analysis From EA Deals DB (Cont.) Verticals that see growth from Q to Q © 2009 IDC 7-09 24
  25. 25. Contact Michael Fauscette mfauscette@idc.com Twitter: @mfauscette Blog: www.mfauscette.com © 2008 IDC © 2009 IDC 7-09

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