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Change Reigns: Software Industry Predictions for 2013

By November 11, 2012Article

Software vendors will swing into action in 2013 to deal with the new market realities of a cloud, mobile, Big Data and social world. And in the face of new competition from younger, more nimble innovative companies, traditional software firms will need to scramble to remain competitive. We asked several industry observers about the changes that will occur. Their answers provide you with a front-row view of what promises to be a game-changing year in the software world.

Q: What changes do you predict will occur in specific segments of the software industry in 2013?

Steve SchmidtSteve Schmidt, vice president corporate development, Flexera Software: Virtualization / cloud proponents will recognize the need for application license management. This is an issue that affects both users and producers of software — and it is not just for infrastructure and middleware components any longer.

Software license management will act as a differentiator for vendors embracing this as a means to monetize their solutions. It also provides an on-ramp for users by providing a means to control and manage access to applications in this environment. Treating virtual / cloud environments as the “wild west” will not work much longer; accordingly, comprehensive strategies for managing software licensing will come of age.

Kevin CoxKevin Cox, vice president corporate marketing, Actian Corporation: User ID (biometrics) and security software will dramatically escalate in the awareness of consumers and will cause other big players from different industries to enter the market. Already social media companies Google, Facebook and LinkedIn are making inroads, but phone companies, credit card companies and governments will likely join the fray.

Jeff Kaplan, managing director of THINKstrategies and founder of the Cloud Computing Showplace: SaaSification of industry-specific applications by ISVs and their channel partners.


Chris Lochhead, Al Ramadan, Dave Peterson


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

  • “Where’s the Online Search Money Lebowski?” — CMOs are the new chief revenue officers and they will be held accountable for acquiring revenue, not leads. The agenda in this mega category will shift from click-through rates from online search to revenue acquisition.
  • “Take the Red Biz Data Pill Neo” — CEOs will invest heavily in understanding what lies inside the matrix of Business Big Data, also known as BizData. They will invest heavily in technology that unlocks and monetizes the data that matters most to their business. The agenda will shift from analyzing data to monetizing data in 2013.
  • “The Era of Big Customers Is Upon Us” — Consumers will have more control than ever over the technology agenda. Big Data, social and CRM will collide to create the new $50 Billion Dollar “BIG Customer” space. This is the new all-encompassing category of Big-Data-based, customer-focused technology. According to Wells Fargo Securities, BIG Customer technologies could represent more than $50 billion in new software investments over the next 10 years.

Paul Ressler, principal, The Cirrostratus Group: Security software will continue to grow rapidly. More niche solutions such as Rapid7 and Veracode will develop and grow. Substantial investment will be made in this space. Enterprises will continue to deal with the BYOD trend and will require many more mobile security solutions. Unfortunately some of the pressure will come from a major and visible cyber security problem.

Gary Liu


Gary Liu, vice president of customer solutions & strategy, ServiceSource: In 2013 and onward, as more companies adopt SaaS and cloud models, recurring revenues will become a critical success factor for companies. Companies can no longer just focus on new sales, inadvertently ignoring the revenue that comes from pursuing recurring sales from existing customers. There will be an even greater emphasis on customer management to ensure high technology adoption and ultimately less churn.

Peter AuditorePeter Auditore, principal researcher, Asterias Research: SaaS vendors will mature and the market will consolidate tremendously in 2013 as enterprise vendors struggle to compete by acquiring successful vendors such as Workday.


Andrew Hay


Andrew Hay, chief evangelist, CloudPassage: There will be significant changes in infrastructure management. We anticipate a “software-defined everything” world in addition to extreme automation. The self-service provisioning will likely turn IT from the provider to the enabler in nearly every size of organization.

Mark MilaniMark Milani, senior vice president of cloud platform, Actian Corporation: Specialized compute and storage cloud services will continue to expand to help satisfy customers’ location, performance and security requirements.



Guy Smith, chief consultant, Silicon Strategies Marketing: Virtualization is on the cusp of several interesting, interrelated and nearly orgasmic points. Soft networking makes servers complete commodity bricks, which then makes implementing clouds completely point-and-click. With the trend toward recentralizing info works apps, server-side and soft-distributed apps become so cost-effective that people may once and for all attempt walking away from Microsoft Office. (Given the endless bugs I have recently encountered in Office, I say Halleluiah!)

Howard DresnerHoward Dresner, president, founder and chief research officer, Dresner Advisory Services, LLC: Business intelligence will continue to remain a distinct category while it dramatically expands and changes in fundamental ways.


Lincoln Murphy


Lincoln Murphy, founder and managing director, Sixteen VenturesI think the biggest disruptions will be to traditional enterprise software vendors and ISVs — across all categories — in markets where the cloud is finally being accepted, the FUD is clearing out, all the value-adds of SaaS are being recognized, and overall cost savings are trumping the traditional software approach.

From what I’ve seen this year, in 2013 healthcare is poised to have some massive disruptions across many different functional and operational areas, from hospital management to Electronic Medical Records.

I think we’ll also see those core business systems, like ERP, that were — just a few years ago —  thought to be the on-premises portion of the hybrid cloud approach moving to the cloud as trust increases and the realization for many businesses that on-premises server-based software is just not worth it anymore, from both a cost and frustration standpoint.

Joe CordoJoe Cordo, CMO, Extraprise: Marketing automation and campaign management will undergo significant change due to Big Data driving the need for these platforms to support unstructured data as well as the need for analytics that provide more predictive capabilities around the data.

Kathleen Goolsby is managing editor at

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