Software as Cold Technology

Phil Wainewright writes that software spending over the coming years will likely be decimated. This makes software yet another example of a “cold technology“, which instead of increasing tech spend reduces it.

A combination of factors mean that businesses today should be going into deals expecting to pay at least one-tenth the price they previously assumed for the same software functionality. That’s what I mean, quite literally, by decimation. Among those factors, these are the main ones:

  • Open standards and open source reduce if not eliminate the cost of software infrastructure
  • Service re-use through shared infrastructure makes it possible to get an order of magnitude more productivity out of existing software and infrastructure assets
  • Globally sourced composite functionality drives down the cost of easily outsourced operations through brute-force competition

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