Software-licensing costs are set to fall over the next decade, as IT industry trends converge to give buyers more bargaining power.
Research firm Gartner predicts that vendors will find themselves increasingly challenged as IT departments look to reduce software costs, as they have done with hardware and services.
Gartner has identified seven major trends converging to change software delivery models, reduce dependence on the giant application vendors, and force prices down.
These include business process outsourcing; software as a service; low-cost development environments, such as China and India, combined with modular architectures and service-oriented architectures; the emergence of third-party software maintenance and support; growing interest in open source; the rise of Chinese software companies; and the expansion of the Brazilian, Chinese, and Indian markets.
Although Gartner says open source won't topple the likes of IBM and Microsoft, the firm believes that it will put pressure on traditional software margin structures, particularly in areas such as servers, operating systems, development tools, and database technologies.
Gartner also predicts that a fourth of all new business software will be delivered by software as a service by 2011.
Source: CNET
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