IDC’s Top Ten Predictions for Software Business Strategies: Vendors Search for the Path Toward Sustainable Growth

FRAMINGHAM, Mass., April 17, 2006 – According to IDC, the major trends in software business strategies in the near- and long-term will focus on the search for a path toward sustained, profitable growth. The study presents the top ten issues that IDC believes will have the most profound impact on software industry models, and reveals the ways in which vendors will expand their business direction through strategic investments, partnerships, and alliances.

“The software industry is in the midst of transformation,” said Stephen Graham, group vice president, Global Software Business Strategies. “Although the industry is growing, the path to sustained, profitable growth isn’t quite clear. From IDC’s perspective, this is more than intense competition and consolidation. Many vendors have opened the door to potential re-invention, which may be a prerequisite for survival as the industry landscape shifts.”

IDC’s top ten predictions for software business strategies include:

1. Partners organize themselves into ’mini ecosystems,’ and these become vendors’ preferred method to target customer solution markets
2. ISV program reformation causes realization of ISV partners’ critical role leading to initiatives seeking major redesign, investment and alignment goals
3. Subscription options expand as vendors strive to increase revenue predictability
4. Software vendors ratchet up channel investments to extend enhanced relationship to a broader base of lower-tier partners
5. Software licensing technology market is poised for growth, but only if vendors and customers can find a process middle-ground
6. Endorsement alliances embark upon a path to extinction while the true measure of alliance success moves closer to the customer
7. The market for intellectual property formally emerges
8. Software vendors commit to the software broker model
9. Large ISV’s launch on-demand versions of their products
10. Mainstream vendors reveal business plans fueled by growth

The study, Top 10 Predictions for Software Business Strategies (IDC #201039), investigates the top ten predictions that will have the most profound impact on software industry business models. The predictions are based on issues that IDC’s analysts believe will be visible to the market this year and will have significant structural impact over the long term.

To purchase this document, call IDC’s Sales hotline at 508-988-7988 or email sales@idc.com.

Contact Information

Stephen Graham

IDC

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