Business of Software

The *business* of software

Got any predictions relevant to the business of software? Or got links to other people's? Post them here. $20 of Amazon vouchers for the best answer ...

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1. The Economy - it’s going to get a lot worse before it even starts to get better. Hence the importance of Marketing During a Recession. My prediction within a prediction is that this time next year, many will be forecasting “the beginning of the end” of the recession. Frightening times.

2. Global mobility - data is going to begin breaking free of local hard-drives or NAS devices. When users start to realise that they can access the same data on their desktops, laptops, smartphones etc. they’re going to be looking for tools that can take advantage of this. Microsoft Groove, Windows Live Mesh, Cloud Computing and friends are only the start of things to come.

3. Friendly licensing - we all know that users don’t own software, they merely purchase the right to use it. As the recession deepens and businesses and consumers start cutting back on budgets, renting software might become a lot more appealing. The software companies with the foresight to build the bandwagon will benefit the most.

4. The UK will be cold, dark, wet and windy for almost the whole year.
Dave has some pretty good predictions (about the last one I don't know, was UK ever – in this century – any different than wet and windy? )

Some predictions for 2009

1. People will spend more on marketing that is measurable and cost effective (Internet marketing), and thus we will focus more and more on web analytics (requesting social media performance indicators, mobile and multimedia tracking tools), cost per action advertising models focus more on conversion rates (usability, A/B and Multivariate Testing).
See the Analytics minibible for Software Vendors http://www.avangate.com/analytics-minibible/analytics-minibible.pdf
2. A lot of opportunities on social media marketing for companies / Twitter :), blogging, wikis, etc (see Intel, IBM social media strategies)
3. Companies will also strive to keep their current clients and include in their strategy loyality programs
4. Strategic partnerships: software bundles
5. Web Based applications / SaaS
6. Build applications to get more customer feedback on the features / developments of our software
7. Focus on HR, build great teams
8. More servers less companies (Amazon Web Services)
9. US Software Companies will focus on other markets: Europe, CIS, APAC (local languages, local currencies, payment methods) - http://www.avangate.com/newsletter/november2008/img/european-softwa...
10. Less print media advertising.
11. Google Search Wiki will change the SEO rules, no more technical tricks but more ingenious marketing. :)
12. The startups and the companies able to think „out of the box” when it comes to marketing, business models, design, products will hold the competitive advantage, unlike corporations that will be forced to reinvent themselves to keep up.
13. People will still go to the Business of Software Conference (especially US software impassioned), even though now most of the last year attendees are thinking they need to cut lots of costs, because this conference was one of the best they ever attended (hey, I came all over from Romania). Attendees will recognize better each other because of this network.
14. Next year at least 80 % of the members of this network will follow Neil on Twitter (and me: @adriana_iordan :))

Channel distribution:
15. Some of the vendors/channel distributors will cancel their presence at events and tradeshows
16. Affiliates, Resellers, Vendors – Who Gets the Customer? -- Channel conflict between resellers, affiliates and vendors will rise as more and more efforts will target the online market – See: http://blog.avangate.com/affiliates-resellers-vendors/
17. Pressure on the existing channel will grow as Channel Managers will try to squeeze everything from them to make the targets
18. Some smaller, less efficient distributors will go belly up in the first half of the year
19. Effective Affiliate Marketing will develop as investments in online marketing will grow
20. Software companies using offline distribution channels will focus to automate processes, instead of orders by fax and management by spreadsheets we will see a focus toward PRM (Partner Relationship Management) and other business intelligence tools.
Some smooth sucker already said software as a service.

I'll go with an expansion on Dave Collins' note about global mobility. The combination of data moving into the cloud and the mental dissonance this causes for many older folks will lead consultants to create senior-friendly hardware configs (based on wireless, Google apps, and gmail?) that simplify the communication process by delineating storage areas into "what was I working on yesterday / last week / for my friends?"
The economy will worsen, and that will both hurt many companies and create opportunities.

1. Companies that try to force more licensing restrictions on clients will suffer, IF other companies step and in and provide better values for clients.
2. Less upgrades will happen in 2009. More and more companies will try and keep older versions useful and functional. If you depend on yearly maintenance this can be good or bad, depending on your rates. Revisiting your policies, perhaps working with clients might create a lot of goodwill and stronger market share.
3. Social networking will become very corrupted with marketing. Those companies that do not provide value and useful information via social networking will find this backfiring.
4. Visualization and cloud computing will see some successes, probably from smaller companies that use these technologies to become more agile.
5. Companies that have a tap into the communities of their users will do better than those that just market/advertise. More and more people are rejecting or ignoring traditional marketing as they fragment into different groups and aren't reachable from TV/newspaper/traditional advertising.
6. There is going to be a lot of competition for jobs as the banking/automotive/financial industries suffer. Lots of good, talented IT people will be out there.
7. Based on #6, I bet lots of new small companies get started. A big year for startups.
I would definitely second Adriana's mention of a strong growth in the implementation of partner relationship management systems.
The indirect sales model has proven itself to be extremely cost effective which is going to be key in 2009, but companies selling through an indirect sales channel will have to manage their channel very carefully to get a maximum return. Monitoring sales data, incentivizing partners and correctly tiering them can only be done using a purpose-built prm system.
All forms of social marketing (Twitter, link-sharing) becomes chaotic as everyone jumps into the space, diluting mind-share, gaming the system, and still caring more about "impressions" than making an impression.

As these forms dilute, new forms and strategies arise. A few companies understand (invent?) this and do remarkably well in 2009 despite the recession.

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