Software rather than wireless to drive IT: PwC

Software applications and Web services will drive the IT market for the next three to five years, according to PricewaterhouseCoopers LLP (PwC).

Last year’s favorite was 3G (third-generation) wireless services.

Martyn Mitchell, lead partner, technology, information, communication and entertainment for PwC said a year on, the drive to wireless technology is now seen by many as “off the mark.”

“There has been a slowdown in wireless (technologies). It is still happening.”

PwC’s latest Technology Forecast: 2002-2004 report, Navigating the Future of Software, said the focus is now on software to drive the value of IT.

The report also highlighted a growth in analytics and collaboration software, portals and real-time information.

PwC also predicted users will start to pay subscriptions for software and Web usage, and open source will become a viable alternative in the near term.

Terry Retter, director of strategy and technical programs, PwC Technology Centre, said vendors are moving from one-time product sales to subscription models.

He said usage base pricing is also often discussed, but it is not yet mainstream, due to billing system issues.

“Billing systems take a long time to get right. So Web services will take much longer to get up and running.”

Retter said Microsoft’s new licensing model was “logical” and the maintenance contract would keep products close to “state of the art.”

Microsoft’s new licensing program, to come into effect in August, will affect customers who buy licenses in bulk. They will be required to pay an annual fee to cover the price of all upgrades for their software during the contract period.

“Why not maintain it, it makes sense. Why not pay for what you use. Major upgrades tend to be expensive and hard. There is a real logic in the change in pricing model.

“The supposition is, will the cost of software go up or down?” On the topic of open source operating systems, Retter said the move towards these sorts of operating systems is obviously viewed as a threat to “industry economics and innovation by Microsoft.”

However, it is rising in prominence among vendors such as Sun Microsystems and IBM, as vendors are able to generate revenue from services or sales of complementary products.

“Support will be a central issue,” Retter said.

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