Software License Revenues Roar Back in Q1
An interesting post by Forrester’s Andrew Bartels offers 2 very encouraging messages for those involved in publishing licensed software.
Firstly, Bartels reports the recovery of licensed software revenues in QT. SAP has reported an increase of 18% in USD$ revenues, Oracle 13% with even higher figures seen elsewhere.
Licensed software, which is treated as capital expenditure, was hit hard by the global recession and it’s a relief to see the market recovering so strongly and so swiftly.
But Bartels thinks there is more at work here than just economic recovery. He believes that the onward march of SaaS may not be moving quite as rapidly as we had been led to expect.
Bartels says that in Forrester surveys corporates repeatedly site 5 key reasons why they are still not moving to SaaS.
- inability to customize;
- difficulty in integration to other systems;
- security of data and information;
- worries about pricing models that put clients on a constantly rising escalator; and
- lack of SaaS products.
Though vendors are making progress in many of these areas there is stall a long way to go. But Bartels thinks that in developing economies, which will deliver much of the growth in software licensing revenues in the coming years, there may be still greater barriers to SaaS adoption, in the form of deeper concerns about security, and issues around internet connectivity and power supply which we discussed in a previous article on cloud computing.
Forrester offer more analysis on the subject at their IT Forum 2010 in Las Vegas later this month. The “Sourcing Strategies For The Business-Technology-Focused Enterprise” track, which includes a session titled: Noughty Software Licensing — Is The Obituary Premature? – could be of particular interest.
The message overall seems to be that for software publishers it’s a little too early to be putting all of your eggs in the SaaS basket.
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