Software market set for continued decline

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Software market set for continued decline

Simon Quicke

The UK software and IT services market is set for a second consecutive year of decline with fears that the medium term prognosis is not as rosy as some had hoped for.

Market watchers TechMarketView nailed the performance of the market last year predicting it would decline in real terms by 2.5% and has followed up that accurate forecast, slightly worse than expected inflation delivered a 2.8% decline in 2010, with a warning of a 3% drop in real terms in 2011.

There will then be a further year of decline with a 1% drop expected in 2012 and then the hope many had in the software world was that the pent-up demand and cyclical refresh plans would kick in and deliver solid growth.

But with the on-going fragility in demand TechMarketView has downgraded its growth forecasts from 2012 onwards.

There will still be some dynamic movement in the landscape on the cloud front but the analyst house warned that this would have reprocussions for resellers and vendors.

"Cloud computing is especially disruptive because it requires both software publishers and IT and business process services suppliers to completely reconstruct their operating and business models," stated TechMarketView .

"The 'winners' in the cloud computing market--if indeed winners there be--will not necessarily be those suppliers whose cloud 'proposition' is the most agile/accessible/elastic/scalable  etc. It will be those who are able to adapt their operating model the quickest," it added.

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