IDC Directions: Software companies of the future

Dr. Tony Picardi, a senior vice president at IDC, spoke this afternoon at the company's Directions conference about a new business model emerging in the software industry, software brokers.

IDC

Dr. Tony Picardi, a senior vice president at IDC, spoke this afternoon at the company's Directions conference about a new business model emerging in the software industry, software brokers. Brokers, which will come in various sizes and shapes, will address the complexity crisis CIOs face when implementing new applications, which span from maintenance to integration, to new product adotption and everything in between. Picardi said that as the software industry matures, we are going to see consolidations and new value propositions, with brokers at the center of it all.

So what is a broker?

Brokers fill the chasm between software publishers and software customers, and they'll be taking care of everything vendors and CIOs don't have the time and resources to deal with, including, but not limited to, securing the solution, testing and certification, handling SLAs, actively managing licenses, identifing and recommending industry innovations, and creating intelligence through integration. They'll use standards like SOA and ITIL, an integration platform, possess a large IP inventory, and build stable alliances.

But Picardi made it clear that using brokers is not like outsourcing. "This is high-value-add, replicate-able, and long-term, not one-offs," he said.

He then singled out some candidate software companies of the future, which included enterprise business process brokers (i.e. Oracle/PeopleSoft, SAP), application suite and specialist publishers (i.e. Microsoft) and domain brokers. He also added a fourth group called disruptive broker candidates who are not software-pure plays, like EDS Agility Alliance and Salesforce.com.

Essential guidance: Vendors, decide on your role. Customers, you are in the driver's seat now and keep pushing the solution envelope, plan for license management, and scrutinize alliances.