Investment decisions in enterprise software, especially for core business applications and infrastructure, create dependencies on products and vendors that last for decades. To maximise return on these investments, CIOs must look at least 10 years ahead. Using a scenario-based planning approach, Forrester has three visions of how software will look - each illustrated by a poker analogy.
In the Three Kings scenario, a handful of very large software vendors dominate the market, burying most other large or midsize software vendors. We forecast that Oracle and IBM will merge. Oracle's application portfolio and database management systems turn out to be perfect complements to IBM's middleware.
The Three Kings scenario also represents a future in which software has become a utility, employing hundreds of thousands of Lego-like software components of standardised business functions that firms assemble to achieve business objectives. Only the largest vendors can provide the rock-solid reliability and security these software components will require, along with deep vertical knowledge to build industry templates for component assembly and the full integration across the software stack that businesses will demand.
For CIOs, the Three Kings means that they have to deal with fewer, but larger vendors that provide the whole stack, as well as a full set of applications and application components. On the positive side, with fewer, larger vendors, software reliability and security will improve, with easier integration and fewer problems needing to be fixed. On the negative side, software costs will inevitably rise, as reduced competition and greater dependence on a core software vendor limits the leverage of CIOs to negotiate better deals. Also, innovation diminishes at the vendor level with fewer small vendors creating new solutions to solve new business problems.
In contrast to the Three Kings, the Full House scenario predicts that some new software providers will rise to dominance out of an unprecedented merger between media, telecoms, and collaborative software interests.
Software will let users move seamlessly between the handheld devices they choose. For some users, factors like fashion and task-specific use will drive interface choice, rather than relying on a single, one-size-fits-all handheld form factor. In the Full House scenario, business people rather than IT drive decisions to buy software that creates rich, empowering user experiences.
The Full House scenario means CIOs will need to set up IT operations that can sustain the maximum amount of reconfiguration and external integration. CIOs will run utilities that balance access with risk mitigation. Data hygiene, security, and closed-loop configuration testing practices must become second nature as CIOs struggle to make sure risk mitigation and governance policies are in place and enforced. On the positive side, innovation will flourish and choice will abound as vendors cross over from other markets to play in enterprise software.
CIOs will also act more like accountants, teachers, and recruiters by communicating technology decisions in terms that non-technical colleagues can easily understand.
In contrast to the relative stability of Three Kings, the Joker's Wild scenario results from dramatic change to the enterprise software market. At least one major new enterprise software vendor rises to challenge the Big Four and, like the Full House scenario, enterprises shift work to the most advantageous locations and suppliers around the globe.