Trends in Enterprise Software Adoption

The trends are as follows;

1)        Global Software Spending Plans for 2008 Similar to 2007

In broad strokes, enterprises' planned software budgets for 2008 are nearly identical to those for 2007. Despite hints of an economic downturn, recent Forrester surveys indicate a 9% increase in global software spending, from $313B in 2007 to $341B for 2008. In fact, data from this survey show that enterprises plan to spend 33% of their software budgets on upgrades and code maintenance, 28% on license fees, 25% on new software development, and 13% on software subscription fees. The critical IT dollars continue to be squandered on maintenance fees — accounting for 33% of the entire software budget.

2)        Strategic and Technology Initiatives Reveal Need for Long Term Applications Strategies

Enterprises continue to face a barrage of requests to deploy new functionality, reduce IT costs, and meet vendor-imposed upgrade deadlines. Typical projects include instance consolidation, software upgrades, integration projects, business process outsourcing (BPO), and process improvement. But these projects often occur piecemeal, leading to organizational fatigue, expensive rework, and lost ROI. The top software priority is given  improving integration between applications (33%). Integration remains the key strategic priority as enterprises seek to leverage existing investments, adjust to hybrid deployment options, and adopt SOA strategies. Meanwhile, upgrading packaged applications (18%), shifting from a functional to a process orientation (17%), and designing a five- to 10-year packaged application strategy (16%) round out the lists and reflect the current needs for enterprises to align software projects to business drivers.

3)        Investment in Packaged Applications Reflect Alignment to Business Drivers

Enterprises must properly align business drivers to long term packaged applications strategy or face failure from a lack of business-IT buy in, changing priorities as economic winds shift, and shifting loyalties as project risk increases. ERP, CRM, Content Management, and BI Lead Interest in Packaged Apps. Customer relationship management (CRM) continues to garner significant interest for first-time purchases (9%). ERP is experiencing a "major upgrade" cycle (21%) that is up 3% from 2007, followed by CRM (14%) and human capital management (HCM) (14%).

4)        Enterprises Embrace Web 2.0 Technologies Albeit Slowly

Tools outside the enterprise continue to be more powerful than what most corporate IT departments can provide. Experiences in the cloud have shown how survey tools, discussion threads, and wikis improve collaboration and productivity. However, the lack of consistent security polices and standards accelerate the need for enterprises to bring these tools inside the firewall, similar to how instant messaging on the web paved the way for enterprise adoption. Large scale and small scale implementation show strong adoption for survey tools (23%), discussion threads (14%), and Wikis (13%).

5)        SOA Adoption Reaches the Tipping Point

Almost a majority of enterprises embrace an SOA strategy. While the approach may take either an enterprise-level strategy (25%) or selectively without a clear strategy (24%), the priority of integration projects in strategic initiatives align with the broad level of adoption. As a result, internal integration (82%) and pure data or information access (51%) represent key usage strategies for SO.

6)        SaaS Moves Beyond SMB’s and CRM

Though traditional on-premise deployments (43%) represent the most common approach, SaaS deployments continue to gain traction in the marketplace growing 50% in adoption from 2007 (4%) to 2008 (6%). Subscription pricing, the shift from capex to opex budgets, little IT involvement, rapid deployment methodologies allow divisional VP’s, general managers, and other business leaders to drive purchasing decisions. For the second year in a row, SaaS remains most interesting to enterprises that are looking at HCM and collaboration. SMB’s appear to be waiting for enterprises to prove adoption. Barriers to adoption, though more fallacy than fact, include integration issues (65%) and total cost concerns (58%) pose significant barriers to SaaS adoption.

7)        New Platform Software Investment Focuses in Collaboration and Content Management

Enterprises step up collaboration efforts and invest in information access to new stakeholders such as suppliers, partners, customers, and new types of employees. We see first-time purchasers show significant interest in collaboration (12%) and content management (11%). On the major upgrade front, respondents expressed significant interest in database (20%), followed by apps servers (15%). Also noticeable interest visible for minor upgrades for application servers (39%) and database software (38%).

So in the end it could be said that, these are a few trends that we would see in the years to come and they would drive the software adoption process. The main factor here would not be new softwares, but newer applications in the same.

Have your say on this. What o you think would be the future. Have your predictions registered with me.