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Software is at a Crossroads

The End of Software by Timothy Chou is a good review of the current challenges in the software world including thought-provoking discussion on the cost of IT and statistics about software application development and usage.

Compelling statistics:

• Over 70% of IT budget is spent on maintenance today. The 30% of IT that is spent on new projects is mainly for upgrades of existing infrastructure or line of business applications.

• Over 70% of IT requests are never fulfilled as IT does not have the capacity, skills and/or budget to complete these requests.

• Applications take between 6 months to two years to implement.

• Customers typically avoid or skip releases due to the cost and pain to implement the release.  Software upgrades can cost anywhere from $400-600 per user with training, business process impacts, infrastructure upgrades, etc. Many times the only impetus for a customer to upgrade is the fact that they will lose support.

• Customers typically only use a very small percentage of the functionality available to them in an application.

• Every $100 worth of software you own, costs you $400 annually to deploy and manage this software.

In summary, it takes too long and costs too much to implement large business applications where users only use a small percentage of the functionality and they do not fully optimize the business. We have to move more quickly.

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