Ovum's David Mitchell told technology law podcast OUT-LAW Radio
that in certain sectors the technology market would enjoy massive
growth, but in others growth would slow to effectively zero.
"By the end of this decade we'll be talking about a £6.44
billion market for software in the UK, a really substantial
market," he said. "Compared to 2003 you're getting close to a
doubling of the market size in seven years."
Mitchell was delivering a technology forecast based on Ovum
research, and said that large industrial-scale software such as
that produced by SAP or Oracle was the business to be in.
"In terms of some of the key growth areas within software, the
business applications area is going to stay growing, that's going
to make approximately 9% growth all the way through to 2010," he
said.
"Some of the areas that are growing less are the support
services market. That's growing at about 3% per annum through to
the end of the decade; that's relatively flat. If you subtract
inflation from those figures, that's a relatively static market,"
said Mitchell. Companies in that business should be thinking about
producing products and producing and licensing intellectual
property, he said.
Mitchell was critical of the current fashion for convergence
which sees IT firms, telecoms companies and software houses all
offering each others' products and services. This would not, he
predicted, be a strategy that is likely to meet with significant
success. "The people for me who are doing best are those who stick
to their knitting and do what they're good at," he said.
"I'm counting convergence as one of those things that is a lot
talked about, there's a lot of money being spent on it, but it's
not one that I personally think that is one of the huge ones to
watch for a lot of money to be made out of it."
Mitchell was confident that social networking sites, currently
the darlings of the investment community, would be able to earn out
the large sums being invested in them. "I think some of these could
prove not to be overpaid, but they'll need very careful engineering
to ensure that the benefits come out," he said. "It does have some
of the uncertainty of the late '90s but I don't think it has got
some of the silliness of the late '90s yet."
Mitchell was speaking at an event organised by ScotlandIS, the trade body
for software, telecomms and IT in Scotland.
