SoftWhere 2005?

IDC recently released the results of their 2004 IT spending study in which they predict a 5.8 percentincrease in U.S. IT spending in 2005. One of the highest growth categories is expected to be softwarewith anticipatedgrowthof 6.6 percentreaching $106 billion this year. Our own research programpegs software as the second ranked initiative area in organizations with more than 500 employees. So software is everywhere. Writing for Open Enterprise Trends, Kevin Bedell, an open source software guru, makes some bold predictions in his recent article, What Execs Want from Open Source in 2005:

In 2005, the dramatic and continued growth for Linux will be joined hand-in-hand with boosts in other Open Source use, (like Firefox and Open Office, to just name a couple). So, stated simply, Open Source is bound to finally hit the radar of even the most pointy-haired of bosses. Non-technical executives will realize that their companies aren't using nearly as much Open Source as they should.

Once executives realize that incorporating Open Source libraries into their development processes can make development go faster and cost less, the smarter ones will begin asking why they aren't using more of it. And this is a question they should be asking. After all, Open Source applications and programming libraries are usually available at little or no cost and they work really, really well.

Look at the growth of MySQL--is thisa cautionary tale for any large software vendor pinning hopes of pushing packaged applications down to the mid-market? Clearly software is the fabric but will its direct costs grow in 2005 or will this be the year we see a lot of software work but no more software spending? My money is on a lot of in-house software development and flat net spending on software licenses and support.