Business Strategy for Software Executives
October 3, 2005
Software’s New Economic Drivers
The maturation of the technology industry means software vendors can watch macro economic measures — as well as IT market developments — as indicators of future growth, valuation and stock performance. Here are the trends to watch.
By Rick Sherlund, Goldman Sachs
The macroeconomic influence on tech is greater than ever as tech has grown to be the single largest component of corporate capital spending—now almost 40 percent of the total.
IT spending was able to well outpace economic growth as it grew as a proportion of GDP from 1.5 percent in 1970 to almost 5 percent in 2000. Since settling in at less than 4 percent in recent years, tech is likely to resume growing as a percentage of the economy, but not nearly at the rate of decades past.
Not surprisingly then, the correlation of IT with the broader economy has jumped from less than 0.1 in the 1970s to over 0.9 in recent years as the industry has matured.
While tech continues to benefit from "mini-waves" of technology shifts (e.g., wireless), there are not the rapid, landscape-changing shifts that drove feverish growth in the 90s. In addition, many of today’s technology trends actually serve to reduce aggregate IT spending.
Meet the New Software Ecosystem
New technologies and business models have brought a whole new set of opportunities and challenges to the software industry. Founding chairman Shirish Netke explains how the launch of the Software Economics Council (SECO) will address these emerging concerns and unite the maturing business ecosystem in this week’s post to the SandHill.com Blog on New Era, New Thinking.
Best Practices for License Compliance
Smart companies can capitalize on open source by developing thoughtful policies covering its licensing obligations. Palle Pedersen, CTO of Black Duck software shares best practices from leading companies in this week’s post to the SandHill.com Blog on open source.
Share your insight on the software business. Email email@example.com with your submissions to the SandHill.com Blog.
Improving Society’s ROI
Meet Christa Gannon, founder of FLY, Fresh Lifelines for Youth. The Silicon Valley-based non-profit rehabilitates juvenile offenders at a rate nearly four times better than that of the justice system and at just 1/20th of the cost — how’s that for a great value proposition? Find out more about Christa, FLY (this year’s recipient of the SHG Foundation grant) and what software vendors can learn from FLY’s teen participants in this month’s installment of Software Personalities.
Poll: $100 Laptops on the Way?
Nicholas Negroponte of the MIT Media Lab says a prototype of a sub-$100
computer aimed at digitizing the third-world will be available in November.
How will this technology impact developing nations?
Last week, SandHill.com visitors speculated on whether a Web-based
application from Google could ever overtake Microsoft’s Windows
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