OK, I admit I'm pretty thankful to say good bye to 2008. Not that it was bad personally, on the contrary, on a personal level it was a very good year. But, as we all know, from a business / economic perspective it was a disaster. While I feel like I made good progress personally and professionally, I realize that many people have had severe consequences to deal with as fallout from the latest financial crisis. So, like I said, it's good to see 2008 in the rear view mirror!
Now moving on, what does 2009 have in store for us? I'm not planning on going through all my predictions for 2009 in this post, IDC has a formal process for publishing those and I'm very represented there. What I do want to do is pull out a few things that are around the edges of those predictions and talk about them a bit. Now truth is, most of these bits are already in previous blogs, but there is some value to pulling them all together. The 2008 financial crisis, the single most important driver in what will happen with the software industry, is a key factor in most of my predictions and my thinking on behaviors, trends and changes. I also believe that we are going through a fundamental industry change cycle for the software market and that we will look different on the other side of that cycle (18-24 months or so). Here are a few random thoughts:
- As a result of the crisis I think that SaaS and possibly open source software (OSS) will see a big boost in adoption, and I've covered that in some detail in past blogs (see those posts for some deeper analysis).
- Social media, social networking tools, web 2.0 concepts are catching on in the business world and that trend will accelerate this year. That said, it's still the wild west and in the end we have to figure out how to measure the impact and business value of this change. I don't know where it's going yet, will web 2.0 platforms like Facebook and Twitter be integrated into business software (for example the Salesforce - Facebook platform integration announced at Dreamforce 2008) or will a new class of enterprise 2.0 business software gain traction (Yammer, Oracle's E2.0 apps, etc.). Even though spending is declining due to the financial crisis I believe that businesses will continue to spend and experiment with these types of initiatives.
- In general, companies are not going to spend money on horizontal products and ERP upgrades if they can help it. They will spend money on high value vertical apps that solve specific business process problems. There are exceptions to this though, some markets will continue to grow at a respectable pace, products like enterprise search and content management for example, should see >10% growth this year.
- In another fallout of the financial crisis, I think businesses will increase spending in the business process outsourcing (BPO) space. The cost savings, the reduction in distractions from core business, the opportunity to increase service levels, etc. are all drivers of this trend. As a secondary and related trend, the increase in BPO spend and availability, which will surely increase competition, will have BPO providers scrambling to find lower cost solutions. The end result could be an increase in the use of open source software in BPO solutions, which would boost the overall OSS market.
- I'm beginning to think that Platform as a Service (PaaS) could be one of the key disrupters over the next few years. Part of that disruption is related to the desire for closer fit of vertical solutions (see my blog post of that topic). If this is true, then the major application players (at least Oracle, SAP and Microsoft) will have to come up with a strategy to get / build / acquire / partner for a PaaS offering and soon.
- Full blown SaaS ERP solutions like Netsuite and to some extent Workday will see good growth in this economy especially in the Mid market where companies tend to continue to invest in technology as a competitive differentiator even in a down economy.
- Google apps are a disrupter and adoption will increase in this economy.
Ok, that I think is enough for now and yes, they do look a lot like predictions, oh well. Look for my and my groups actual "predictions" in an IDC doc that will be out sometime this month.
