In a report published yesterday, analyst IDC said a number of factors are driving the software industry towards subscriptions, including increasing complexity of customers’ IT systems and a growing inability to manage different software contracts.
IDC said there is also an increasing disconnect between current licensing models and the perceived business value of business software.
The analyst, who surveyed 200 ISVs and customers, said 72% of vendors and 70% of customers strongly believe that the software industry must place a greater focus on clearly establishing the business value of software.
Forty three percent of software vendors and 26% of customers believe the majority of worldwide software revenues will be derived from subscriptions by 2010. Today, 75% of participating software vendors’ aggregated software revenue comes from perpetual licensing instead of subscriptions.
IDC predicted the software market will move towards licensing models and practices that increase the predictability of vendors’ revenues, make it easier for customers to manage and comply with contracts, and which clearly establish the business value of software.
This article is based on material originally published by ComputerWire
