Software: Days of Double-Digit Growth are Dust

Uncategorized Posted Nov 12, 2004 by metropolis

While we are still basking in the afterglow from the recent jaw-dropping, record-breaking, toe-curling World Series win for our beloved Red Sox, news reports seem determined to burst our balloon with a gloomy outlook for tech.

First, it was a tad depressing last week when IDC’s Tony Picardi reported that “the double-digit growth rates experienced in the last decade [in software] will not return in the foreseeable future.” IDC is projecting a 6.2 % increase in growth for global software revenue in 2004. This year is expected to ring in at $189 billion, up from $178 billion last year.

Then, pig-piling on, The Wall Street Journal ran a story on Nov. 9 about CIO do-it-yourselfers who are making do with what they have (the nerve) instead of demanding the latest bright new shiny tech toy, which we all know is the American Way. According to the story, corporate tech spending grew roughly 15% in the first half of the year compared with last year, but slowed to 9% in Q3.

But there are bright spots. A Merrill Lynch survey of 50 North American IT execs says segments like business intelligence, data warehousing and security will be hot. IDC reports that open source software will be the fourth most popular platform by 2008, compared to the No. 7 spot it currently holds. And none other than Kim Polese, CEO of new open source startup SpikeSource, told CNET that the software industry is heading into a renaissance, with “software going into every conceivable appliance or object that people interact with in daily life.”

So I’ll stick with the glass half full crowd on this one. We might not see 20% growth again for some time, but there is still tremendous innovation ahead.