Worldwide enterprise software revenues are set to remain flat for 2009 according to the latest research from Gartner.
The analyst firm predicted total revenue of $222.6bn in 2009, reflecting a ‘flat’ 0.3 per cent growth rate compared to the $221.9bn recorded in 2008.
But despite the forecast, Gartner said the enterprise software market has the potential to weather the economic downturn better than in 2001 and 2002, because the market is different in terms of maturity, penetration, confidence in IT and the geographical and vertical mix.
Tom Eid, research vice president at Gartner, said: “The fourth quarter of 2008 was the turning point in creating an uneasy selling environment that may usher in several difficult quarters for the enterprise software markets.
“Current expectations are for a slow economic recovery, mirrored by software spending upturn starting no earlier than the first half of 2010.”
Gartner also said that software vendors that have a balanced mix of channel, new license and maintenance revenue streams, and flexibility on contractual terms, have the strongest options for continued growth.
Larger vendors may also be less vulnerable as they have both a good geographic balance and a sizeable maintenance stream, and can bundle and price aggressively to grab a bigger share of software budgets.
Fabrizio Biscotti, research director at Gartner, said: “All geographies felt the impact to some degree of a slowdown in software spending in the fourth quarter of 2008 and will again through 2009. Most mature countries will feel the greatest impact, while emerging regions will also have slower growth rates than previously forecast, in particular Eastern Europe, whose prospects have been deteriorating remarkably.”
Biscotti added: “In general, we anticipate a wave of interest around technologies that can help cost optimisation. This will benefit alternative software acquisition models as organisations will look for ways to shift spending from capex to opex. Vendors offering Software-as-a-Service, IT asset management, virtualisation capabilities and an ability to leverage open-source software will benefit.”
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