Monday’s Musings: 2009 Enterprise Software Predictions

Published on December 1, 2008 by R "Ray" Wang

So it’s that time of year for holiday cheer and pundits to tempt fate and pontificate.  Here are some very very draft predictions for 2009 in order of most likely to least likely to pan out:

End user predictions

  1. Heavy discounting continues for new license. Discounts include non-monetary concessions such as training, implementation, integration, and other professional services.
  2. SaaS contract terms move from annual terms back to month to month contracts.
  3. Single source ERP strategies lose appeal as customers move to contain exposure to vendor lock-in with large ERP vendors.
  4. SaaS integration becomes a requirement as customers seek hybrid deployment options.
  5. Consortium and shared service buying move beyond the public sector.
  6. Customers with more than 3 ERP systems move to reduce to 3 or less.
  7. Custom dev shops extend functionality on PaaS offerings.
  8. Software appliance adoption exceeds that of open source.
  9. Lack of third party maintenance seen as anti-competitive.  Customers demand options.
  10. Industry groups ban together to define web services and business process standards.
  11. Open source SaaS software improves open source adoption rates.

Vendor predictions

  1. SaaS vendors continue to take market share away from pure on-premise vendors.
  2. Intense software discounting in Q4 2008 and Q1/Q2 2009 drives less capitalized vendors to go broke or be acquired.
  3. ISV’s battle for ecosystem partners as capital for innovation becomes scarce.
  4. Apps vendors torn between building on .NET, delivering their own SaaS offering,  or hosting with another vendor like SFDC.
  5. M&A activity abounds in Gov Con (i.e. Public sector, Education, Utilities, and Defense verticals) as vendors seek to consolidate around public infrastructure spending.
  6. Specialized apps vendors emerge to meet micro-industry niches and many arise from system integrators with software development expertise.
  7. System integrators forgo vendor “warnings” and deliver on third party maintenance.
  8. A few system integrators will acquire software vendors and drive towards solutions convergence.
  9. Software vendors improve support and maintenance offerings.
  10. Large ERP vendors cede the SMB market or acquire for market share presence.
  11. Cloud computing remains a 2009 buzzword and every vendor will dilute the meaning till it becomes meaningless.

Your POV.

Send me your view of 2009 and what you think will be hot or not.  What’s the one trend you think will pan out? Feel free to share with me your experience.  You can post here or send me a private email to

Copyright © 2008 R Wang. All rights reserved.

  • Ray,

    Given the tough times, boiler plate predictions on SaaS, Cloud, etc. seem pedantic and meaningless. Drastic changes are happening in the industry and buzzword-driven trends are out. Here is my view. – IT-spending is tight for CIO’s. Since top line growth (revenue) is slow, every one is focusing on bottom line which is cost control. So any solution that reduces cost will be welcome. That brings us to the biggest trend – Application Modernization. Enterprise clients are stuck in the client-server model of business applications, analytics, etc. for last decade or so. They are blissfully unaware of the great advantages of a web-platform-based delivery, seen in the consumer space. So the transition from client-server to RIA is key for lowering TCO and improving efficiency. At Curl, we have seen over 400 large enterprises deploying B2B and B2E (like procurement, field service management) applications delivered on the web. The cost savings are enormous. The switch to more client-based processing reduces server round-trips (read performance) and cost. Scalability and security are key needs here, so Ajax tyoe solutions fall flat. This is not theory, but actual practice. These customers do not waste time debating buzzwords and technologies. They start with “improving the procurement process” and naturally switched to Curl-based RIA. I predict 2009 will be the year of RIA for the enterprise. A true transition from the old client-server architecture to the modern web-based architecture will take off.

    Jnan Dash Chief Strategy officer, Curl Inc.

  • Hi Ray, Interesting post, and I think a lot of those are good points. The one observation/question I’d have concerns your first end-user prediction. I agree that software licensing discounting will continue but question how much this will influence discounts on the attach of professional services. I think this may be a bit controversial because I think it will only be true for certain business segments (i.e. enterprise/corporate), or for IT buyers who go through direct channels. For the mid-market or anyone really who’s going through VARs or SIs I think their real leverage would be negotiating even steeper discounts on licensing. Cutting out services attached to software could be pretty disasterous for the indirect players in 2009, since they make next to nothing on the software anyway. Would love to hear if you agree/disagree Finally concerning vendor point 11, we may not have to wait until 2009 for vendors to dilute the term ‘cloud computing’ and render it meaningless — I think we’re there already. Best, Matt

    PS: Jnan — great plug for your company there, although some of what you’re saying does sound like a lot of the same arguments I’ve heard for other webservices/SaaS/app cloud offerings (or I guess RIA in your case). I’m not aware of many companies that don’t debate technologies before deploying, and from where I sit the procurement people make sure we have desks and stationary etc. I work in IT.

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