It’s been a good year for the software industry, with many firms poised to make big money as more companies digitise their activities. Yet a new year means new challenges, coupled with the threat of new start-ups usurping the old guard. Here are the expected highlights.
1. Cloud
The cloud has both overhyped and maligned as a means of storing data and business applications, but even with the debate ongoing the direction of travel is clear. This year Forrester Research estimated that the global public cloud market will be worth £122bn by 2020, compared to £37bn in 2013.
As with many trends, this is both a problem and an opportunity for software firms. While the likes of Infor assure their customers that they will not be pressured to leave on-premise, other firms like NetSuite revel in cloud technology, labelling on-premise providers as dinosaurs. Either way, managing the transition will be one of the greatest challenges for software vendors next year.
2. Verticals
The Internet of Things (IoT) promises to connect everything from your watch to your fridge to the internet, potentially opening a plethora of functions for business software. Yet the increased connectivity will require software to make the devices functional and intuitive to use, opening the prospect of highly-focused vertical programs for each industry.
Already a gap is opening in the industry between those who provide such specific tools and those who wish to remain as a general platform, Infor being among the former and Salesforce among the latter. While there may be room for both types of firms, IoT is likely to change the market for good.
3. Education
Even as the possibility of industry-specific tools becomes more likely, many believe that tools are not being used as effective as possible. Alan Pelz-Sharpe, research director of social business at 451 Research, told CBR that vendors could not just sell licenses any more.
"The reality is that’s not how an SAP or an Oracle does it," he said. "When you get into very complex, big deals you need to be offering more than a software license." His suggestion was that firms start providing more professional services to educate customers in how best to use their tools.
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4. Big data
As privacy advocates are fond of telling us, we are having more data collected about our lives than ever before. Yet many of those collecting data are not shady government spooks, but companies looking to improve their services and make more money.
The trouble is that few have figured out how to make meaningful use of that data. Statisticians’ salaries can be as much £100,000, according to career database Glassdoor, which means that creating meaningful graphs anybody can use is a big priority.
5. Legacy
Once an entire business has been built on the back of software it can be a nuisance to move, and the tools that were once a boon become a hindrance. Not only can this halt productivity, but it can even endanger corporate data, as evidenced by the Shellshock bug which was more resilient to tough-to-patch legacy systems.
This means firms have excellent incentive to shift from old tech to new, but they need the help of vendors to help them. Even as support was withdrawn from Windows XP this April, as many as a quarter of computers users were still on the 13-year-old OS, which is not a situation that should be repeated.
6. Licenses
At the SAP User Group conference in Birmingham this November, the software vendor’s customers sent a clear message to the firm over its licensing costs, which were branded a barrier to adoption of new technology by 15% of those surveyed, with some complaining they were difficult to understand.
With more and more non-IT departments in companies now looking to spend money on computing technology, such concerns over costs are only likely to sharpen in the next year – and it will not just be SAP who has to deal with it.
7. Mobility
A survey from security firm Trend Micro less than a month ago claimed that two-thirds of British workplaces were seeing their employees bring wearables to work. While the results raised questions over what people thought of as wearables, the trend towards mobility is unmistakeable.
Several software vendors have already rolled out products for smartphone, including Salesforce, Microsoft and Oracle, but the race is now on to see who can dominate the market that promises executives the ability to run a business from a phone. The winner will be the firm that can make software accessible and functional.
8. Integration
On being appointed as the new head of Intel Security, Chris Young said that cybersecurity was creating its own problems due to a plethora of vendors and solutions. Whilst he was talking about cybersecurity, the problem extends to every section of IT, including general enterprise software.
Most information executives will have felt the pain of having to manage a portfolio of programs with varying levels of compatibility, particular when they are challenged to move data between the two. Integrating different functions into one suite is therefore a boom not just to security men, and will help firms become more productive.
9. Security
Innovation has been the main focus of the technology industry for some time, and has been latched onto by consumers and businesses eager for convenience and functionality. Yet as this year has proved, forging ahead without securing your systems can be highly damaging for the company, as has been proved by the likes of Home Depot and JP Morgan, among others.
While many of the problems are the responsibility of cybersecurity, security has to become a priority for software vendors too. As the industry which makes programs intuitive and satisfying to use, the software industry has plenty to contribute in securing our technology.
10. Rejection
The tired notion that every company should consider itself a tech company is one that has to be frequently challenged in Silicon Valley circles. While all firms can benefit from better tech, most see software as a tool rather than a vocation, a view that many in the industry would do well to heed.
"We’re not a software company," said Antoine de Kerviler, CIO at Eurostar. "Software is there because it serves our customers and so we will only create, adapt , configure or customise software packages because it serves the customers. If it doesn’t we won’t."
