November 29, 2007
One of the central arguments for the value of software-as-a-service (SaaS) may be losing at least some of its potency. In a research note published earlier this month, research firm Gartner outlined several trends that will, among other things, reduce software license fees over the next decade. The average applications vendor will find technology buyers looking to reduce software costs in the same way they have with hardware and services costs.
Software vendors must therefore establish more realistic margins to guarantee long-term survival in what will become an increasingly competitive market, according to the document. “Up until now the unique nature of the software market has meant that buyers had very little negotiating power after the initial purchase of a software license,” said William Snyder, research vice president at Gartner, and report author, in a statement.
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