If software is "eating the world," in the words of Marc Andreessen, the world also has a reciprocal appetite for software. From 2020 until 2030, Forrester estimates that global software spending by businesses will climb from $920 billion to north of $1.3 trillion. Software will continue to spread, mediating, recording, and enabling more users, transactions, products, and business activities, driven by:
A global business software market of $1.36 trillion is gargantuan, to be sure, but this number actually reflects a paradoxical slowdown in software spending growth; we estimate 4% annual growth over the next decade, compared with 7% per annum in the period 1995 to 2020. Why? In a nutshell, software will get much cheaper; a variety of factors will bend the cost-per-unit-of-function curve downward:
In a period of slowing growth of software spending, vendors and customers will face new challenges and opportunities. Read our next blog post to understand the implications of the impending buyers' market for enterprise software.
This post was written by Senior Vice President, Research Director Chris Mines, and originally appeared here.