The UK software market will be one of the worst hit sectors
affected by the worldwide recession according to analyst Ovum.
Ovum reported that growth in the UK business software market
dropped sharply in 2008 to 4.9% from 9.4% in 2007. Ovum estimated
growth in the software market would shrink further in 2009 to 4%
then bounce back slightly in 2010 before strengthening in 2011 and
2012 (but at a much slower pace than in 2006-07).
Ovum analyst Laurent Lachal said the dip was steeper than
expected by most at the beginning of the year, because the UK has
been one of the Western economies worst hit by the current world
recession. He said, "The UK was one of the top three countries with
the most planned IT budget decreases and the [least number of IT
budget increases."
Lachal predicted that software providers would try to make their
revenues less dependent on up-front licensing fees by relying more
on maintenance revenues and by expanding into software as a service
next year.
He predicted growth will be strongest in the information
management sector (6.9% Compound Annual Growth Rate (CAGR) between
2008 and 2012, against 5.4% for the total UK software market)
followed by systems infrastructure (5.5% CAGR) and business
applications (4.7% CAGR). Lachal believed front-office applications
will be less affected by the downturn than back-office ones. He
said suppliers of specialised and vertical applications (eg,
healthcare management systems and telecoms billing) will also feel
the pinch less than others (except in areas that are vulnerable to
recession, such as finance).
