Software shake-up to put support in doubt

User companies must speak out to safeguard their interests ahead of an expected shake-up in the software industry, an analyst has...

User companies must speak out to safeguard their interests ahead of an expected shake-up in the software industry, an analyst has warned.

Research published last week by UK research firm Xephon predicts a wave of acquisitions over the next few months. This will see larger IT suppliers fighting to acquire small, innovative software companies in a bid to boost flagging revenues.

But this could mean less choice and support for users, Xephon warned.

With the economic downturn continuing to bite, many larger IT suppliers - particularly those with a hardware background - are keen to bolster profits by moving into software markets such as customer relationship management and e-business.

"It has always been a worrying sign when the big fish swallow the smaller software players," said Mark Lillycrop, director of research at Xephon.

"When you are talking about the software products that underpin a firm's activity, there is a danger that users will lose some flexibility. Smaller players tend to be more innovative and easier to deal with, whereas larger ones are after cashflow and support can be less reliable."

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