As businesses continue to cut back on IT infrastructure spending-on such items as PCs, telecommunications and networking devices-they are looking to roll those savings into software that can help them drive innovation and give them a competitive edge, according to Gartner analysts. The greatest opportunities for software vendors lie in emerging markets, such as Asia/Pacific and Latin America, Gartner says.
Decreased spending by businesses on IT infrastructure could be an
opportunity for software vendors, according to analyst firm Gartner.
In a report released July 28, Gartner analysts said they expect businesses
worldwide to increase their software spending in 2010, particularly in Latin
America and the Asia/Pacific region.
Much of that spending will come from savings from tightened infrastructure
spending-in such areas as telecommunications, PCs and networks-with businesses
looking for what Gartner calls "frontier applications" that are aimed at
driving innovation and giving businesses a competitive edge.
"Frontier applications make major changes in business performance possible,
such as leveraging the Internet for new delivery channels or using Web-based
technology to improve self-service capabilities," Gartner analyst Joanne
Correia said in a statement. "Such applications are becoming increasingly
essential in today's competitive business environment."
Gartner surveyed about 1,000 IT professionals worldwide about future IT
spending. Thirty percent of respondents in the Asia/Pacific region and 28
percent in North America said they expect their IT
budgets to increase in 2010. A quarter of those in the EMEA (Europe,
Middle East and Africa) region said
their budgets will grow.
However, software spending in North America is
expected to decline 2.06 percent next year over 2009, and will grow only 0.45
percent in EMEA. However, in Latin America, software
spending is expected to grow 2.54 percent in 2010, and 4.34 percent in
Gartner attributes the difference to the relative maturity of the markets.
The analysts say software vendors need to find ways to help businesses find
areas in which to cut costs and find ways to make those savings go further.
"Software vendors should continue to build, fund and invest in software
sales and marketing programs, even during tight market conditions, to maintain
customers and expand revenue opportunities," Correia said, noting that an
economic downturn presents advantages for companies with the right business
plans. "Vendors need to use a consultative selling approach to understand and
then address the most critical needs of IT and the business of their current
and prospective clients."