Software Prices To Fall In Ten Years

November 26, 2007 8:19 a.m. EST

New York, NY (AHN) - The rise of Chinese software companies and the expansion of the Brazilian, Chinese and Indian markets will help to lower software costs in the next 10 years, particularly in servers, operating systems, development tools and database technologies, said Gartner research vice president William Snyder in a new report.

Business process outsourcing, increasingly competitive open source applications and third-party maintenance suppliers are converging to lower software costs, he said.

Snyder predicted Tuesday that a quarter of all new business software would be delivered by software-as-a-service by 2011.

"Costing out the possibility of using offshore skills to build application functionality as web services will also help negotiations with vendors," he said.

Companies should expect to be able to reduce their software costs significantly as new factors dramatically change the traditional hold of software makers over buyers, he said.

These companies used to have little negotiating clout in buying software but this is now beginning to change, PC World reported.

"Software buyers need to realize that the pendulum is beginning to swing in their favor and that there are an increasing number of alternatives in today's software market," Snyder said in the report.