Software Costs Projected to Decline

Dennis Faas's picture

Amidst all the worries over Black Friday security threats and the random phishing scheme, there's finally some good news for home and business software users. According to research firm Gartner, computer software should begin to decline significantly over the next decade.

According to Gartner research vice president William Snyder, there are a number of reasons for the projected slip in costs. Collectively, they could drastically change the relationship between those producing the applications and those who need them.

In the past, software buyers have had little say in the cost of the products they purchase. "We expect those dynamics to change considerably over the next 5 to 10 years, giving CIOs and software procurement officers more bargaining power while potentially reducing software vendor profit margins," Snyder says. (Source:

In the report supplied by Gartner, Snyder argues that "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." This means buyers should be able to increase their own profits at the cost of vendors. (Source:


According to Gartner, several of the "alternatives" include business process outsourcing, open source applications, and third-party maintenance. By 2011, Snyder believes upwards of 25% of corporate software will be provided in a software-as-a-service model.

Like the nearest Wal-Mart, the domination of Chinese products is driving costs down. Software from Asia -- as well as Brazil -- will help to reduce the costs in operating servers, corporate operating system networks, development, and databases. The emergence of international software alternatives, in addition to a growing base of open-source applications, will force established software companies to work especially hard for the home and corporate dollar in the future.

As energy costs and security threats continue to chip away at corporate profits, it's certainly nice to hear that at least one trend will actually save users money.

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