Worldwide spending on software will increase 3.5 per cent this year to $US76.1 billion from $US73.5 billion in 2002. Buyers were still cautious when spending their software budgets, according to Dataquest, an arm of Gartner.
In 2003 and 2004, companies would invest primarily in software that helped get the most out of earlier investments and cut business costs, the company said. Vendor options would be thoroughly reviewed before a deal was signed, which benefited large vendors purely because of financial viability.
The software market has gone through stormy weather over the past two years with large seasonal swings and a 0.7 per cent spending decline in 2002 compared with 2001.
This year, a survey showed that chief information officers expected no increase in software budgets over last year, but an investment burst in the end of the year would help the market to some growth, Dataquest said.
Questions about viability of some of the smaller and pure play vendors had helped large vendors selling suites of products win 5 per cent in market share over the last eight quarters, the company said. Smaller pure-play vendors included Ariba, BEA Systems and Blue Martini Software. Microsoft, Oracle, PeopleSoft and Siebel Systems wereexamples of large players.