Follow us:

Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

July 11, 2007 at 11:05 AM

CIOs more interested in BI than security now, Goldman says

Business intelligence has risen to the top of CIO shopping lists but it’s a complicated situation, Goldman Sachs said in a report today. An excerpt:

“Though business intelligence purchases remain a high priority, we are also cognizant that we may currently be in a period of peak interest — and thus that the demand in the future may decelerate from here.”

Yet it expects “brisk” consolidation in the BI sector “in the coming quarters and years” as BI vendors buy additional technology, companies consolidate market share and BI vendors are acquired by applications and infrastructure vendors.

Microsoft is positioned to take advantage of the mid-market segmen, which has the biggest growth potential, the firm said. It’s going after the category with Office as the interface and three server products: SQL, SharePoint and the new PerformancePoint.

Bigger software companies are also looking for recurring revenue streams in acquisition targets they want to “strip mine,” the report said:

Recent acquisitions in the software sector have brought recurring maintenance revenue stream into focus in assessing the strip-mining value of a company. We would expect to see further consolidation in the software sector and believe that potential acquirers are likely to remain focused on recurring revenue as a means to help evaluate/finance these acquisitions.

The firm expects the overall software industry to grow 7.7 percent. Here’s its outlook on other categories, which referenced IDC research:

• System infrastructure software accounts for 35 percent of total software spending and we forecast growth of 9 percent to $101 billion by 2010.

• Enterprise applications revenue accounts for 31 percent of total software spending and is forecast to grow to $101 billion in 2010, implying a compounded annual growth rate of 6.2 percent.

• Application development and deployment revenue accounts for 14 percent of total software spending and is forecast to grow to $41 billion in 2010 implying a compounded growth of 7.4 percent.

• Desktop applications revenue accounts for 12 percent of total software spending and is forecast to grow to $38 billion in 2010, implying a compounded growth of 9.4 percent.

• At $18 billion in 2005, database is expected to grow to $24 billion in 2010 with a 6.6 percent compounded growth and thus be one of the slowest-growing segments.

Comments | Topics: Enterprise, Microsoft

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►