The lines are blurring between software and services — with the rise of cloud computing, that trend has accelerated faster than ever. But customers aren’t just looking at cloud business models, such as software-as-a-service (SaaS), when they want more flexibility in the way they license and use software. While in 2008 upfront perpetual software licenses (capex) made up more than 80% of a company’s software license spending, this percentage will drop to about 70% in 2011. The other 30% will consist of different, more flexible licensing models, including financing, subscription services, dynamic pricing, risk sharing, or used license models.
Forrester is currently digging deeper into the different software licensing models, their current status in the market, as well as their benefits and challenges. We kindly ask companies that are selling software and/or software related services to participate in our ~20-minute Online Forrester Research Software Licensing Survey, letting us know about current and future licensing strategies. Of course, all answers are optional and will be kept strictly confidential. We will only use anonymous, aggregated data in our upcoming research report, and interested participants can get a consolidated upfront summary of the survey results if they chose to enter an optional email address in the survey.
Two months ago, we announced our upcoming Forrester Forrsights Software Survey, Q4 2010. Now the data is back from more than 2,400 respondents in North America and Europe and provides us with deep and sometimes surprising insights into the software market dynamics of today and the next 24 months.
We’d like to give you a sneak preview of interesting results around some of the most important trends in the software market: cloud computing integrated information technology, business intelligence, mobile strategy, and overall software budgets and buying preferences.
Companies Start To Invest More Into Innovation In 2011
After the recent recession, companies are starting to invest more in 2011, with 12% and 22% of companies planning to increase their software budgets by more than 10% or between 5% and 10%, respectively. At the same time, companies will invest a significant part of the additional budget into new solutions. While 50% of the total software budgets are still going into software operations and maintenance (Figure 1), this number has significantly dropped from 55% in 2010; spending on new software licenses will accordingly increase from 23% to 26% and custom-development budgets from 23% to 24% in 2011.
Cloud Computing Is Getting Serious
In this year’s survey, we have taken a much deeper look into companies’ strategies and plans around cloud computing besides simple adoption numbers. We have tested to what extent cloud computing makes its way from complementary services into business critical processes, replacing core applications and moving sensitive data into public clouds.
Smoke and fire is all around you, the sound of the alarm makes you dizzy and people are running in panic to escape the inferno while you have to find your way to safety. This is not a scene in the latest video game but actually training for e.g. field engineers in an exact virtual copy of a real world environment such as oil platforms or manufacturing plants.
In a recent discussion with VRcontext, a company based in Brussels and specialized since 10 years in asset virtualization, I was fascinated by the possibilities to create virtual copies of real world large, extremely complex assets simply from scanning existing CAD plans or on-site laser scans. It’s not just the 3D virtualization but the integration of the virtual world with Enterprise Asset Management (EAM), ERP, LIMS, P&ID and other systems that allows users to track, identify and locate every single piece of equipment in the real and virtual world.
These solutions are used today for safety training simulations as well as to increase operational efficiency e.g. in asset maintenance processes. There are still areas for further improvements, like the integration of RFID tags or sensor readings. However, as the technology further matures I can see future use cases all over the place – from the virtualization of any kind of location that is difficult or dangerous to enter to simple office buildings for a ‘company campus tour’ or a ‘virtual meeting’. And it doesn’t require super-computing power – it all runs on low-spec, ‘standard’ PCs and the models are only taking few GBytes storage.
So if you are bored of running around in Second Life or World Of Warcraft, if you ever have the chance, exchange your virtual sword for a wrench and visit the ‘real’ virtual world of a fascinating oil rig or refinery.