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Friday, May 06, 2005

Backlash Against Open Source & Limited Growth For Packaged Software!!

(Via Fortune) David Kirkpatrick fresh from attending the Software 2005 event writes, buyers tell some software vendors about their impending doom.David sees loud voice emerging from the user executives about poor software.

- CIO’s& IT executives assembled in the Software 2005 meet express their concern about poor performing software and said that they're devising their own solutions. Customers are getting weary of poor quality, inadequate security, old-fashioned business models, and tall claims for trends like open source. They just want software that works.
- Big, lengthy projects are unlikely to be seen in the coming future going by the sentiments expressed by the IT executives. Self developed applications are picking up a lot more and Roger McNamee said,"The 1990s were about one-size-fits-all applications like [SAP's] R3 or Oracle…but this decade will be about custom-built applications." Ken Berryman of McKinsey points to the marked decline in the use of both packaged applications and custom-built third-party software (from services companies like IBM and Accenture) as a percentage of total business software spending. Meanwhile, software written by companies for their own use grew from 31% of total investment in 1998 to 42% in 2003.
- Many signs at Software 2005 suggested customers are insisting on getting more even as they spend less.
- Open-source software was on everybody's lips, but not as a panacea. Software executives spoke of the headaches they're having as developers insert bits and pieces of open-source code into commercial products. Each fragment potentially falls under a different licensing scheme, and managers are having a hard time tracking what they do and don't have the rights for, even as programmers are going code happy. A minor backlash may be developing, because open source has its own headaches. In other words, the sofware world is beginning to get real with right focus on value and results.

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