Software Market Influenced by Nexus of Forces: Gartner

The cloud is a force to be reckoned with, according to a recent report from Gartner.

And enterprise software buying, in particular, is increasingly shaped by the Nexus of Forces. Gartner said that technology providers must realize that the disruptive forces of cloud, information, mobile and social will reach mainstream status in 2014 and create new technology requirements, drive new purchasing and establish new competitive realities, according to an article on eWEEK.com.

In the Nexus of Forces, information is the context for delivering enhanced social and mobile experiences, while the cloud enables delivery of information and functionality to users and systems. The intertwining of these systems creates what Gartner calls the “Nexus of Forces.”

“Starting in 2014, the enterprise software markets will undergo their greatest level of disruptions, growth and new opportunities since the year 2000,” said Tom Eid, research vice president at Gartner.

“By 2017, Gartner estimates that new IT buying based on the Nexus of Forces will drive more than 26 percent of total enterprise software market revenue, up from 12 percent in 2012. This represents more than $104 billion to new worldwide enterprise software revenue from cloud, information, mobile and social initiatives in 2017.”

Eid said that the nexus forces must be evaluated, analyzed and understood as adjacent and synergistic, not solely as independent or non-connected.

“While there has been a great deal of excitement from the vendor community regarding cloud, information, mobile, social, and other forces and technologies, adoption in organizations and businesses has yet to catch up with the hype,” Eid said. “Adoption trends of new technologies frequently take many years before reaching maturity, stability and broad market usage. The nexus should be seen as a development and design philosophy rather than as a packaged product.”

While the use of collaboration technologies, data analytics, mobile devices and software as a service (SaaS) have been in effect for more than a decade, their adoption and popularity have increased significantly over the last few years.

Vendors’ offerings continue to improve, and usage benefits are becoming more tangible. Gartner expects that new revenue generation and growth rates derived from the Nexus of Forces’ impact on enterprise software markets will far outpace overall market growth through 2017.

Cloud and SaaS popularity and adoption have continued to increase since 2008. Buyers are under pressure to mitigate operational costs, evaluating less-capital-intensive alternatives and more modern software. In addition, annual increases in technical support and maintenance fees and business disruption because of upgrades from suite vendors are prompting IT managers to evaluate other options and vendor choices.

Cloud-based offerings need to be tailored to specific needs and requirements. First-time purchases are commonly characterized by short time frames, limited computing requirements, and line-of-business or departmental buying. More comprehensive and mature usage of cloud-based offerings is more strategic and frequently represented by long-term projects to transform technology access/use with oversight and funding from IT management.

Patrick Burke is a writer and editor based in the greater New York area and occasionally blogs for Rackspace Hosting