Software as a service – a catch-all phrase covering everything from on-demand applications to renting software over the Web – isn’t catching on in Canada they way it is in other countries, according to an industry survey.
The good news, however, is that vendors who have been pushing the approach as a hosted service are bringing partners into their strategy to improve the chances of SaaS spreading.
That’s one of the conclusions drawn by IDC Canada vice-president Joel Martin, author of a just-released survey of the Canadian software market which makes 10 predictions for the year. Partners selling software and related services will have a good year if the projections are accurate.
Martin believes the software market will grow 5.8 per cent to $7.1 billion, up from $6.8 billion in 2006, pushed by the adoption of mobility, virtualization and SaaS.
“That’s pretty good growth,” Martin said – almost double the expected growth of the overall IT industry in Canada, and roughly where growth was three years ago. The predictions are based on an examination IDC research as well as discussions with vendors.
Among the conclusions, governance and process controls will be increasingly baked into core enterprise systems, software will take a key role in enterprise mobility and SaaS vendors will reach out more to partners to stimulate adoption of the technology.
The finding on SaaS was one of the surprises, he said. “A lot of the hay made [in the media] is on vendors going direct to market – salesforce.com, for example – and going to blow away the channel.”
“But Canadian companies are very risk-averse. So putting all their information on a server in the ether with some partner without knowing their track record is not something that grabs them.
“They want to be dynamic, they want to be adaptable but they want a partner who understands their industry, their business and their workers’ needs and help mobilize them, which leads to a software as a service mode.”
Another surprising conclusion is that Canadian companies are still lukewarm to expanding the use service oriented architecture in their IT infrastructure. Vendors continue to push the virtues of SOA in linking disparate systems, but few leaders of organizations are pushing IT managers to develop enterprise-wide solutions. As a result SOA tends to be incorporated one at a time in new largely departmental applications.
“Partners are going to have to go in an educate customers on the long-term benefits (of SOA),” said Martin. Meanwhile those implementing solutions have to be aware of opportunities to recommend where SOA is worthwhile.
“IT could turn into a tremendous value-add for a partner who can talk about the business benefits, and then, over time, ensure that a customer invests in SOA tools that tie it all together.”
Martin was also caught off-guard by research that shows graphic artists and media designers will step up from being a small part of application development teams to become first-class members.
Vendors, partners and organizations realize that making applications easy to use an intuitive, said Martin. For example, he said, look at the effort Microsoft has made in overhauling the interfaces of Windows Vista and Office 2007.
Other predictions include:
–Collaborative and content management applications will bring a business touch to Web 2.0.
This can be seen in the latest products announced at the recent Lotusphere, where tools for creating Web 2.0 effects as wikis and blogs are being merged into Lotus applications, or Microsoft bringing collaborative tools into Office, so users can find them without having to open several applications at once.
–Governance and process controls will increasingly become baked into core enterprise services.
With regulatory agencies increasingly pressuring publicly-traded firms to be more open and accountable, having governance software separate from ERP apps won’t do it any more. So ERP vendors are either acquiring companies – as SAP did in buying Virsa – or writing their own applications and adding it to their ERP software.
Partners should talk up this new functionality at every opportunity, said Martin.
–Enterprise search will gain momentum as established vendors and Web-based players make a play for the enterprise market.
Google, for example, is moving increasingly into enterprise search with an appliance (being sold here through Compugen). But Martin also noted that business intelligence vendors such as Cognos are incorporating enterprise search tools in their applications. Watch for the release later this year of Microsoft Performance Point, said Martin, which ties business intelligence closer to search.–Vendor marketing will take on a community-based focus.Strictly speaking, this is not a software prediction, but an observation on how vendors will make sales pitches. Recognizing that certain people in organizations can be very influential in recommending software, vendors will encourage customers to form communities so individuals can talk about their use of technology.Rather than have the partner be the sole IT trusted advisor, Martin said, they should leverage the experiences of customer staff to drive new business.
–Virtualization will begin to take new shapes.
The country’s organizations have moved beyond enterprise storage and server consolidation, said Martin. Now the idea is spreading into medium and small-sized companies.–Security, system management and storage software will continue to merge as executives demand improved quality of service. As a result, vendors will bring out more simplified approaches to melding these three critical infrastructures.
–Software will take a key role in enterprise mobility. Arguably, this recommendation is not surprising as an increasing number of workers use laptops and handheld devices for work out of the office.
Martin observed that IDC research shows that notebooks will outsell desktop PCs by a six to one ratio this year.
To take best advantage of this trend, partners have to make sure their customers understand the potential for mobile devices to help their organizations, Martin said, as well as how to protect them.
