Software sector hit by falling sales

British software developers are struggling to find customers as companies hold back on buying new applications

The UK's software industry has been hit by a big drop in orders, which is forcing many companies stop developing new products, according to reports.

The Business Application Software Developers Association (Basda) will release figures this month showing that the sector has been hit by a significant drop in demand, according to the Sunday Business newspaper. Many companies are deciding not to upgrade their software and business systems, and this slowdown in trade means that software developers cannot afford to create new products.

Basda represents 350 companies that develop and supply business application software. Chief executive Dennis Keeling told Sunday Business that some of its members didn't know where their next orders would come from, while others are concentrating on simply maintaining existing software.

Self-employed IT workers could also be badly hit by this slowdown. There is likely to be a decline in the number of companies who will be employing contractors to set up new applications.

Back in July, Basda warned that it could see evidence of a slowdown in application software sales. It warned that 18 percent of application software providers had experienced a decline in sales in the second quarter of 2001 compared to only 10 percent in the first quarter of the year.

According to recent figures from the Gartner Group, the global software market grew by six percent in the first half of this year. This is disappointing compared to previous years of double-digit growth. Gartner warned that last month's terrorists attacks in the US will "extend and intensify" the economic slowdown -- which will have a negative knock-on effect on the software sector.

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