28 January 2008
by Paul Kunert
The open source community and vendors promoting software-as-a-service (SaaS) will present a serious threat to software giants embedded in local Government as IT managers scrutinise budgets.
This was according to the Society of IT Managers (SOCITM), whose recent survey of 468 heads of IT in the UK revealed that expenditure will increase nine per cent in 2008 to £3bn with a growing portion spent on software.
Though the exact figure was not available, John Serle, author of IT Trends 2008 at SOCITM, said that in general more money was being spent on software than hardware, particularly Microsoft applications, and alternatives might be sought.
"You have to wonder how much longer it will be before the Government cracks and moves to open software," he told MicroScope.
He added: "Other competitors to Microsoft are coming into the market with SaaS. Google is expanding what it offers and due to the amount of money spent on software, these services will be considered."
"There will be a serious threat to vendors in the application space," predicted Serle.
It would take a bold CIO to move thousands of employees into a new desktop paradigm, said David Mitchell, senior vice-president of IT research at Ovum. "That is not to say they won’t consider it, but it’s a bold move."
There was also a fallacy that open source was free, he said: "You can download open copies of office and deploy it but most CIOs would require a support package… because they want more certainty."
Gordon Davies, CEO at integrator Adepteq, said the public bodies his company was talking to prioritised efficiency gains and transforming services, but warned that open source could create headaches.
"When you look at the true cost of deploying, it is anything but free, you need to re-skill your employees and make sure all the applications running are compatible," he said.
But there was no doubt SaaS looked compelling for organisations he said, "and vendors that traditionally got away with extraordinary high cost structures will not be able to get away with it in the future."
Ovum has predicted a 59 per cent increase in UK software-as-a-service market revenues in 2008 to around £800m and Microsoft operates in this sector with its CRM application featured in the Dynamics range.
