Trends Report

Packaged Apps Versus Platforms For Custom Development: Which Ones Sell Better?

IT Spend Analysis 2009: The Right Focus For Software Vendors

July 31st, 2009
With contributors:
Christopher Andrews , Miroslaw Lisserman

Summary

In times of economic challenge, IT budgets face the same pressures as other cost centers of a company. We thus analyzed the 2009 IT spending plans of 2,731 IT executives and technology decision-makers to identify any budget shift between different software categories due to overall IT budget pressure. We specifically focused on the balance between packaged application budgets, often used to reduce costs via standardization on the application layer, and middleware platform budgets, used to create custom applications and integrate complex IT environments. The overall result is a segmentation by company size and industry vertical. While Global 2000 companies (20,000 or more employees) and the utilities and telecom industries are especially shifting their budgets to middleware platforms, very large companies (5,000 to 19,999 employees) and the retail and wholesale industries are favoring packaged application software. Many software vendors and systems integrators missed their initial targets in Q1 2009 and could increase their sales efficiency by focusing on the right customer segment.

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