Software license discounting 'the norm' in downturn

Peter Dinham
Sunday, 07 June 2009 16:42

IT Industry - Development

The economic downturn has brought some benefit to businesses buying new software, with steep license discounts and maintenance concessions, seemingly now the market norm.

IDC in a recent survey of IT and line-of-business (LOB) professionals, found that more than 60 percent of those surveyed thought that now was a good time to negotiate those steep discounts for traditional on-premise software, with businesses and organisations “highly interested in software pricing options that help shift spending from capital budgets to operating budgets.”

According to IDC’s Amy Konary, in an economy where traditional licensing approaches are under fire, software companies, in order to survive the downturn and position for growth in an eventual recovery, “will have to evolve their go-to-market approach,” and, she added, “subscription pricing and SaaS will play a key role."

As well as an interest by organisations in shifting capital budgets to operating budgets, Konary said that, in addition, “more than half of C-Level executives surveyed are open to buying software from a small firm with a very short track record, if the price is good and functionality seems at least comparable.”

Konary says there will be more information on the IDC software survey in its next lot of briefings, including an update on the growth expectations for SaaS and subscription, which will also highlight “the key characteristics that customers are looking for in the pricing of software offerings.”