Spending on new software projects rises, survey says

Companies are now spending as much on new projects as on ongoing operations, Forrester Research finds.

For the first time, companies around the world are planning to spend as much on new software projects as they do maintaining existing systems, according to a new report from Forrester Research.

Though half of IT budgets will still be devoted to ongoing operations, the other half will be spent on new initiatives, Forrester found.

However, roughly two-thirds of respondents cited updates to legacy systems and packaged applications as top priorities.

"There remains a clear focus on improving existing assets rather than taking new solutions on board," analyst Holger Kisker wrote.

BI (business intelligence) is the top-priority software category, with 38 per cent saying they plan to install it or expand their current implementations. Nearly half are only planning to adopt standard reporting and dashboard tools, but "more advanced analytics are catching up steadily."

Collaboration (37 per cent) and CRM (35 per cent) rank next on the new projects list.

Those categories surpassed back-office software such as ERP (enterprise resource planning) and HCM (human capital management).

Other figures reflect a general maturing of companies' IT infrastructure. Only 21 per cent of respondents named software consolidation as a priority for this year, down from 36 per cent in 2008.

"Many companies have consolidated their supplier base by now. But growing SaaS adoption also means that companies are increasingly comfortable with heterogeneous application environments, so supplier rationalization is not seen as so critical anymore," Kisker wrote.

34 per cent of respondents considered SaaS of high importance, an increase from 22 per cent three years ago. SaaS adoption will stand at 37 per cent and grow to more than 50 per cent next year, according to Forrester.

In addition, nearly half of respondents are now developing or "have concrete plans" for mobile applications, the report adds.

Forrester surveyed 2,403 "IT executives and technology decision makers" in the US, Canada, France, Germany and the UK, from companies of all sizes.

Overall, the findings are reflected in recent moves by major software vendors such as SAP and Oracle.

SAP is hoping to cement itself as a dominant provider of mobile applications that tap data from its range of ERP and CRM applications. Last year, SAP acquired Sybase and recently announced a series of new mobile applications and development tools.

The vendor is also making new forays into analytics with its HANA (High Performance Analytic Appliance) software.

Oracle, with its upcoming Fusion Applications, is hoping to appeal to customers' changing buying habits and preferences. Fusion Applications will be highly modular, allowing customers to adopt them in a la carte fashion if they choose, and deployable in on-premise, hosted and SaaS form.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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Chris Kanaracus

IDG News Service
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