Software spending is set to rise in the first quarter of next year according to Salomon Smith Barney...
Software spending is set to rise in the first quarter of next year according to Salomon Smith Barney's New York-based analyst Gretchen Teagarden.
She remains upbeat on the prospects for the market despite what she described as the 'drought in spending' on software during the first part of this year but added the reason for this was that 2000 had been so strong.
Teagarden said: 'In 2000 we had the millennium bug, dot.com spending and legacy companies such as Citigroup spending because they did not want to be Amazoned. In 2001 we are working through the excess software supply.
'Consultants will be the leading indicator for a pick-up and new demand for software will start in the first quarter of 2002.'
She cited a survey by Fortune Magazine of the top 50 chief information officers in corporate America, which highlighted the extent to which software had become a buyer's market, with deal prices down by up to 40%.
In addition, Teagarden highlighted a growing interest in mainframes by corporations. She said the internet was giving mainframes a 'new lease of life' because they were more efficient for a business than running a large number of servers.
The development of the web as an information tool is also causing growing competition among firms such as BEA, IBM and Oracle to be the software provider, according to Salomon Smith Barney.
Teagarden said they had all seen Microsoft's success as a software provider when information was provided by PC or client server and they were all determined to have the same role themselves with the web.
She predicted that whoever had this software role would be the next 'unregulated monopoly'. For any company to achieve this, she said it would have to be characterised by having a market share of around 60% with its closest competitor coming in at around 15%.www.ifaonline.co.uk
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