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Trends that will affect your Business

The rapid pace of technology innovation has resulted in the availability of software that can do just about anything. So the next frontier of innovation is not new software but rather ways to use the software already available in order to leapfrog your competitors. That's why nFold has sponsored a Leapfrog Award in association with the Computer Society of SA; to recognize achievement in this arena.

Ever since nFold has been conducting software research, the number one issue with software has been how much it costs. For mid-sized companies, subscription / rental pricing reduces the up front costs normally associated with buying and installing software. Expect to pay about one third of the total purchase cost (calculated over three years) for each year that you rent your enterprise software.

The big constraint to adopting pay per use / on demand pricing in South Africa has been the high cost of bandwidth, because usually this pricing model assumes that the software is hosted on the Internet, not installed on your network. Small companies can now afford always-on internet access (such as ADSL, GPRS or wireless connection). So I see small companies starting to adopt this model more and more.

The buzz about 'portals' has been humming for many years and seems to be getting louder with the hive of activity around 'service oriented architecture'. With handheld devices becoming more pervasive, bandwidth constraints diminishing and on demand pricing on the uptake, the logical next step is for users to have a single view from which they can seamlessly work on any function in any system from any device, whether the system runs on their local network or anywhere in the world. It's technically feasible for many different applications to have a single, unified user interface. In fact, your web browser and windows desktops are already portals to a whole world of different systems and functions (with a few inconveniences such as the need to log in many times to many systems).

According to a press release from Gartner in 2005, mid-sized companies spend roughly two thirds of IT budgets on infrastructure (such as networks and servers) and utility applications (such as email and payroll). This leaves only one third of the budget for systems that improve business performance by increasing turnover, reducing costs or improving efficiencies. In my view, more money will be spent on value adding systems in future, as infrastructure and utility applications increasingly become commodity items. However, a large chunk of the budget will still go towards infrastructure and utility applications, because they have become mission critical. I'm sure you would find it difficult to imagine a month without email or without your accounting system.

Our last survey asked respondents to comment on their use of open source software. The open source trend is still relatively minor (with approximately 1/6 companies admitting to some sort of adoption). The adoption of open source databases seems to be growing more rapidly in importance than any of the other uses of open source. Also notable was the increase in open source server application software being used. But by far the most dominant use of open source software remains its use as a server operating system. I'm sure most of you will have heard of Linux, you might even know different brands, like SuSe or Redhat. But how many of you have heard of MySQL? Or SugarCRM? I'll wager only about one sixth of you.

In July, nFold conducted a telephone survey to find out what CRM software is being used by the institutional marketing teams in South Africa's asset management companies. To conduct this survey, nFold contacted 14 asset management companies telephonically and asked to speak to the institutional marketing manager (or the person responsible for managing bulk communication with institutional customers). Amongst other questions, we asked them what methods they use to communicate with customers, conduct marketing campaigns and manage customer details.

nFold wanted to determine whether CRM software has come of age for asset management companies, and the answer seems to be a resounding "YES". The 14 asset managers surveyed are familiar with 9 CRM systems; by which we mean they are either currently using the CRM system or will be using it in future. Some companies are already implementing their second CRM system. Only three of the fourteen companies surveyed do not have a CRM system yet, and two of them are currently looking for one.

Having said that, there's more manual intervention and reliance on in-house systems than expected. It's interesting to note that no more than half of the respondents used software for bulk communication, marketing or customer information. So there is still room for growth.

Software Spotlight

This month, we're the spotlight is on locally developed software, leading up to our Local is Lekker conference and expo on Friday, 20 October 2006. Diarise this date to come and share a boerewors roll with us. More details to follow.

nFold regularly profiles software in the nFold Software Quarterly newsletter. Click here to see a quick reference of all software profiled in the past.

Please note that prices may be based on prevailing exchange rates and should be taken as ballpark estimates only. For updated pricing, contact the relevant supplier. Appearance in this table does not constitute an endorsement. nFold does not take responsibility for the accuracy of this information and will not be held liable for any losses arising from the use of this information.