Trends in Software

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Over the last two years The Quill Consultancy has observed the increasing difficulty faced by organisations and small business in maintaining an appropriate Standard Operating Environment (SOE). The reasons for this are manyfold but include:

Lack of resources available to continually perform the upgrades required to keep software current
A general feeling that changes to software and hardware are not providing organisation with the business benefit that justifies the upgrade
User backlash to constant upgrades
Key business applications lacking compatibility with new versions of the operating system and applications
Businesses not seeing the return of investment from their IT outlay
The spiralling cost of software.

Most organisations have now well established hardware purchasing cycles and at the time of purchase an appropriate standard software image which typically contains the preferred Microsoft operating system and a copy of Microsoft Office is deployed.

Microsoft continues to identify products that it considers obsolete and will not continue to support. Examples of operating systems that have a "use by date" are listed below:

MS DOS x.xx (December 31, 2001)

Windows 3.xx (December 31, 2001)

Windows 95 (November 30, 2001)

Windows NT 3.5x (December 31, 2001)

Windows 98/98 SE (June 30, 2003)

Windows NT 4.xx (June 30, 2003)

In one sense this should not be a concern as most organisation seek their support for Microsoft products through a Microsoft Certified Partner and provided that partner continues to have the expertise to provide the support then not too many issues will arise. One significant issue, however is that as an operating system gets closer to the "use by date" device drivers for newer hardware may not be developed by the hardware vendor. We are aware of this issue for some hardware when running NT 4.0 Workstation.

Under the Product Lifecycle Guidelines, Microsoft plans to make Windows desktop operating system licenses available for purchase for a minimum of five years and assisted support offerings available for four years. This is best explained by the following diagram:

For more information about Windows lifecycles click here.

Essentially Microsoft is saying they have an expectation that organisations will upgrade their operating system every 3 to 4 years. We believe that many organisations will continue to use a particular operating system longer than four years as they see little business imperative to change. The same can be said about versions of Microsoft Office with most organisations having chosen to upgrade only every second version and a general reluctance exist today to upgrade to the XP version due to budgetry restraints and little perceived business value.

We have noticed that particularly over the last two years the reluctance of many organisations to upgrade for the sake of it. Organisations are tired of the "hype" from the industry about the latest and greatest. They do not want another 50 new features which they see as irrelevant to their business. This is leading to a market that is increasingly fragmented when it comes to operating system version or core business software requirements.

Organisations are not seeing any reward stemming from their loyalty to a particular software vendor when they are increasingly hit by price increases significantly more than inflation when upgrading their software. It is true that as time goes on the software costs will increase as a percentage of overall IT expenditure but in our opinion software vendors need to reward their loyal clients with significant discounts. This should be increasingly true as software vendors are having greater success in limiting software piracy. Failure to at least attempt to respond to this concern will see many organisations start to seriously looking at less feature rich and therefore much cheaper alternatives. We consistently see, for example, many people which are quite happy using 5% of the word processing package's capabilities but that is all they require to meet their job requirements!

Evidence suggests in general terms the cost of hardware has significantly decreased over the last 5 to 6 years, while software has dramatically increased, the cost of necessary IT personnel has stayed relatively constant, communications costs have increased and other miscellaneous costs have slightly reduced. As we move forward the software industry is moving actively away from perpetual licensing, for example when you buy the software you have the right to use it for life, to software leasing which requires an annual fee to be paid for the software usage. Whereas this type of pricing model fits well with organisations that like to have a recurrent budget for IT it will lead to an increase in the overall cost of software.

Clearly software vendors would much prefer a steady cash flow (as would any business) and leasing software can best meet this objective. With organisations feeling the pressure financially we suspect this will lead to organisations choosing cheaper options for their core operating system and generic business applications such as word processing and spreadsheets in the future provided they provide core functionality. The need for feature rich software is the domain of the specialist, not a requirement of all staff in an organisation.