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The Software Spending Pulse for 2013

By November 11, 2012Article

On the cusp of a new year, we asked several industry observers three questions about where the software spending will occur in 2013. Overall, and not surprising, they predict the majority of spending will be for cloud solutions. More interesting are their opinions on bleeding-edge software that will influence spending next year. Read on to find out about software hairballs in 2013, SRP and the unifying factor in almost all spending decisions.

Q: What bleeding edge aspect of software solutions will arise in 2013?

Kevin CoxKevin Cox, vice president corporate marketing, Actian Corporation: The recognition of individual beings by biometrics rather than passwords, no matter what application or website they are using.

 


Chris Lochhead, Al Ramadan, Dave Peterson Chris Lochhead, Al Ramadan and Dave Peterson; co-founders and partners at Play Bigger Advisors:

  • Mobile payments/transactions — the electronic wallet will emerge and make things like credit cards as obsolete as writing a check.
  • The personal / wearable camera market continues to explode and companies like GoPro will extend their category king dominance as they penetrate mainstream customers.
  • Sensory applications will also rise, delivering a new class of services and applications around data that is captured from the terrestrial world. In other words, we will enjoy applications based on data collected from stuff that moves around the planet.
  • Despite the best efforts of many companies like WeVideo, SocialCam and others, the “Instagram of Video” will not emerge in 2013.

Peter AuditorePeter Auditore, principal researcher, Asterias Research: Hadoop and open source software are taking hold, and the ecosystem around Hadoop will drive innovation and bring new levels of functionality, including security.

Zach NelsonZach Nelson, CEO, NetSuite: It will be the emergence of services resource planning (SRP). Services is by definition a project-based business. But with dozens or hundreds of projects in the pipeline at any given time, it’s nearly impossible to execute projects on time and budget using ad hoc solutions, spreadsheets and manual processes. SRP gives services organizations a cloud-based solution to manage the full life cycle from lead to project to cash, with integrated capabilities for project management, resource optimization, project accounting and billing, and client management.

NetSuite services automation is used by such services firms as the global digital advertising agency MRM and the services division of Informatica, the world’s leading supplier of data integration software; and it’s helping them and others to stop bleeding revenue through gaps in antiquated software and processes.

Joe CordoJoe Cordo, CMO, Extraprise: All software providers in marketing automation will be looking to incorporate the handling of unstructured data.

 

Guy Smith, chief consultant, Silicon Strategies Marketing: Crowding. There are a lot of machines and humans now perpetually interconnected, which Facebook has proven to be compelling. Any solution that harnesses tons of raw horsepower and millions of human brains has a chance to break old modes of accomplishing goals.

 

Andrew HayAndrew Hay, chief evangelist, CloudPassage: The concept of “continuous deployment” will slowly be adopted by the big software players, instead of just the small and agile startups. It’s not likely to be for existing big software packages but, rather, for new modules and product releases.

Also, we’ll see greater portability of server operating systems, applications and data. Organizations are going to want the freedom to run their systems wherever they choose — be it on premises in a data center or virtualized infrastructure, across multiple public, private or hybrid cloud architectures or some combination therein.

 

Q: What will dominate software spending in 2013 among small and midsize businesses?

Zach NelsonZach Nelson, CEO, NetSuite: SMBs are in a headlong rush to the cloud, ridding themselves of software hairballs that have plagued performance and stymied growth. We’ve hit a critical mass at which cloud computing is widely regarded as reliable, secure and richly functional, and industry analysts bear that out. Gartner, for instance, forecasts that worldwide Software-as-a-Service (SaaS) spending will nearly double from 2011 to 2015, to $22.1 billion.

SMBs are capitalizing on cloud flexibility and access to pioneer new markets. RingCentral is disrupting the telco industry with inexpensive, cloud-based phone systems that help SMBs manage mobile, fax and email communications. SurveyMonkey has grown from a one-man startup into the world’s leading provider of web-based surveys, used by millions of organizations and individuals. Marketing software provider HubSpot grew its revenue nearly 1,200 percent between 2008 and 2012, ranking No. 314 on the 2012 Inc. 5000. There are hundreds of other SMB success stories that are accelerating the global migration to the cloud.

Joe CordoJoe Cordo, CMO, Extraprise: More sophisticated use of marketing automation capabilities. Small and midsize businesses need to become more efficient about growing their business, and investing in more effective marketing and sales technology is one way to increase growth at the expense of larger competitors.

 

Howard Dresner

 

Howard Dresner, president, founder and chief research officer, Dresner Advisory Services, LLC: In general, SMEs have the same needs for business intelligence as larger organizations. However, they place a higher priority upon mobility and cloud BI and a lower priority upon Big Data and data warehousing.

 

Guy Smith, chief consultant, Silicon Strategies Marketing: Hosted services — SaaS and PaaS. A problem for the SMB space has always been a lack of IT talent to find, evaluate, install, configure and maintain solutions that take small to midsized, and midsized to enterprise. Hosted solutions allow low risk, low cost and low organizational impact to the companies that need it most.

 

Jeff Kaplan, managing director of THINKstrategies and founder of the Cloud Computing Showplace: Analytics because every business leader wants to better measure and manage their operations while they improve the quality of their customer interactions.

 

Mark MilaniMark Milani, senior vice president of cloud platform, Actian Corporation: Business applications in the cloud will continue to be a focus of small and midsize business spending. The functional and delivery capabilities of these solutions continue to improve, while the cloud business models fit the requirements of this market well.

 

Andrew HayAndrew Hay, chief evangelist, CloudPassage: Security will need to catch up as customers and regulators push small and midsized businesses to clean up systems that have been developed quickly, with little focus on security and privacy.

 

Peter AuditorePeter Auditore, principal researcher, Asterias Research: Aside from security, social media and business intelligence initiatives will dominate in 2013 and beyond because they will provide competitive advantage for smart companies.

 

 

Chris Lochhead, Al Ramadan, Dave Peterson Chris Lochhead, Al Ramadan and Dave Peterson; co-founders and partners at Play Bigger Advisors:

  • Midmarket, cloud-based apps will rule the roost. Today a small company can literally run all facets of its business for little to no cost using cloud services like Google Documents and Calendar, low-cost, high-function CRM from Zoho and file sharing and collaboration with Dropbox.
  • Freemium momentum continues and QuickBooks potentially gets unseated by players like FreshBooks, Zoho Invoice, and Outright.

 

Q: What will dominate software spending in 2013 among large enterprises?

Howard DresnerHoward Dresner, president, founder and chief research officer, Dresner Advisory Services, LLC: Large enterprises will continue to spend heavily on traditional (IT-driven) BI projects that focus upon data warehousing, self-service, dashboards, etc. Initiatives such as Big Data, advanced analytics and integration with operational processes are resonating with large organizations more so than smaller ones.

 

Joe CordoJoe Cordo, CMO, Extraprise: Large enterprises will increasingly seek to integrate their marketing automation, campaign management and CRM platforms. The unifying factor is the use of data. It needs to be accessible to every business unit, and it needs to use customer intelligence solutions in order to increase predictability in the customer life cycle.

 

Zach NelsonZach Nelson, CEO, NetSuite: Large enterprises have invested billions in SAP, Oracle and other ERP systems to standardize operations at the corporate level, but subsidiaries are typically a Tower of Babel running a multiplicity of Sage or Microsoft Dynamics GP in-house software, and the ubiquitous Excel. That’s fast changing as enterprises adopt two-tier ERP — deploying cloud business management across their subsidiaries and synching it to on-premise ERP at headquarters.

Companies like Qualcomm, Land O’Lakes, Procter & Gamble and Jollibee have gone live on NetSuite OneWorld at the subsidiary level in a fraction of the time and cost that would have been required for an in-house ERP deployment. In a matter of months, they’ve got global financial consolidation and real-time visibility into subsidiary performance, and are conducting business across borders effortlessly with support for 190+ currencies, 19 languages and tax automation covering more than 40 countries. With the strategic imperative to open new revenue streams, meet competitive challenges and achieve critical cost-efficiencies in manufacturing, the two-tier hybrid is fast emerging as the solution of choice.

Peter AuditorePeter Auditore, principal researcher, Asterias Research: Aside from security, enterprises will also spend significant resources on modernizing the data center with appliances and new database technologies that enable real-time analytics to address SCRM and customer experience management.

 

Mark MilaniMark Milani, senior vice president of cloud platform, Actian Corporation: Private, public and hybrid cloud solutions continue to be a focus of large enterprises, as they take advantage of the reduced costs and improved agility this delivery model can provide to the business.

 

 

Andrew HayAndrew Hay, chief evangelist, CloudPassage: Based on our research, it appears that companies have big plans for deploying critical applications in public cloud architectures. We’ve noticed a dramatic increase in planned deployment slated for next year. This includes temporary workload and Big Data processing projects in addition to media content hosting and internal development and testing.

Organizations are also looking to replace existing tools with cloud-hosted alternatives or, in some cases, push their existing vendors to provide their software in SaaS form, to take advantage of the savings offered by cloud architectures.

With all of these applications out on the public cloud, organizations will require security and compliance tools to help them stay safe and operate within the bounds of regulatory and other compliance mandates.

Chris Lochhead, Al Ramadan, Dave Peterson Chris Lochhead, Al Ramadan and Dave Peterson; co-founders and partners at Play Bigger Advisors: Large enterprises will invest heavily in enabling technologies for BYOD. This will drive new priorities in security, IT asset management and cloud provisioning.

 

Kathleen Goolsby is managing editor at SandHill.com.

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