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
