Competitive forces are converging to reducesoftware licence fees, says
Gartner
The analyst company expected that leading application software
providers would find themselves particularly challenged as end-user
businesses looked to reduce software charges as they have done
successfully with hardware and services costs in recent years.
William Snyder, research vice-president at Gartner, said: "We
expect that over the next five to ten years, chief information
officers (CIOs) and software procurement officers will have more
bargaining power."
"Up until now the unique nature of the software market has meant
that buyers had very little negotiating power after the initial
purchase of a software licence," Snyder said.
But power will shift to the user, he predicted, due to the
popularity of new delivery models such as the increased use of
business process outsourcing (BPO) and
software as a service (SaaS) and new business models such as
open source offerings and third-party maintenance companies.
Snyder also believed the transition to
service oriented architectures (SOAs), combined with the
emergence of effective, low-cost offshore development options will
give users greater choice and lower software development costs,
allowing them to reduce dependence on the giant application
suppliers.