Speaking to 2,000 delegates at the HP OpenView Universe in Lisbon, Kutnick said the tough economic climate would reduce the number software houses, which would benefit users.
"At the moment we see around 8,000 software vendors in the industry and it is expensive for business to manage a large number of vendors.
"We expect a 20-25% attrition rate until we get down to the point where we see a few thousand vendors," Kutnick said.
Addressing the large number of chief information officer's in attendance, he said, "The question facing many business is can the software [that you need to deploy] work with your existing infrastructure? It's not that we can't do it but what are the costs and consequences?
"Increasingly, you [the CIO] need to communicate to the business and to maybe force them to change their requirements to meet your infrastructure." Kutnick said.
Meta Group believes that as much as half the cost of application deployment is in restructuring, and that businesses that develop strong infrastructure and deploy software that works will benefit in 2003.
Although HP used its conference to encourage delegates to turn IT into an "on-demand" service, Kutnick said that "on-demand is not right for every situation".
Instead, he suggested that some services, such as Web access and e-mail could be offered at lower levels of performance during potential unscheduled downtime.
He suggested that the huge cost of creating completely redundant infrastructures should only be reserved for mission critical applications.