Luxoft Company presents its forecast key industry trends, customized software development for 2009.
Taking into account the desire of companies to sharply reduce the costs of the crisis, it seems that the main purpose of corporate customers in 2009 will decline and optimization of IT costs.
It is clear that significantly reduce the number of outsourcing initiatives, which will not be able to guarantee a relatively quick return on investment in the project.
New projects are not providing a clear and immediate impact on business processes will be suspended. Thus, it should be expected to increase the number of projects to develop customized software to support key business processes and reduce «secondary» IT projects.
Autsorsery with efficient distribution model for the development will benefit from this trend, making the production to countries with lower cost of labor, – such as Vietnam.
In 2009, the tense situation in the global economy put forward in the arena of custom software development quite a number of new customers that were previously not using outsourcing.
This trend is particularly pronounced in Europe and in large measure for industries with long periods of development and the withdrawal of the product on the market (for example, the automotive industry).
The main goal for these clients will receive the maximum short-term cost savings, the possibility of which is often directly dependent on the depth of understanding of the supplier of outsourcing services to business processes the customer.
Thus, the priority criteria for selecting autsorsera in this case will be deep industry expertise of outsourcing companies, as well as the presence of an effective model autsorsera «engagement» for new customers.
In 2009, customized software development industry, despite the recession the world economy will continue to move towards management autsorserom full cycle application development (Managed Delivery Model).
End users are primarily interested in vendors that can manage the full cycle of software development that offers the customer significant benefits: a fixed cost, predictability and a high level of responsibility autsorsera as a whole.
In particular, such an integrated approach will be important for the development of high-tech segment of customized software, when the client will be able to optimize development costs and get a guaranteed return on investment in the project.
Due to a marked decrease in IT budgets and drastic measures to reduce costs, suppliers of custom software will reduce the state personnel working at the site of the customer (on-site).
Today, the financing of such personnel has become one of the most significant of the costs of outsourcing companies.
World leaders in the field of outsourcing at the moment are in the state up to 15-20% of staff working on-site, but under pressure they are forced to move development to other countries (off shore), and can reduce the number of on-site staff of up to 10% .
The reduction in the number of staff working on-site, will enhance the significance of autsorsera expertise in managing full-cycle application development. Customers will require suppliers with deep industrial expertise, as well as capable with a minimum of resources on-site to develop high-tech software to effectively manage a geographically distributed project.
The world economic crisis will contribute to the strengthening of labor markets in Russia and Ukraine (as well as in other Eastern European countries). In 2009, as a result of the downturn in the economy free up a significant number of highly qualified IT personnel.
According to a study by the Association of Consultants for recruitment (ACPP) in November 2008:
– 31% of IT companies have made staff reductions, 31% said the planned reduction to the end of 2008, 8% – in early 2009, and 30% planned reduction in the I quarter of 2009;
– 27% of IT companies have made the reduction of wages and соцпакета, 7% were going to do so by the end of 2008, and 47% – in early 2009
Reduced IT budgets in the financial industry, commerce, tourism, automotive and other industries would lead to the emergence of the labor market a significant number of IT personnel with highly specialized expertise.
Due to this, service providers of software development will be a unique opportunity to strengthen their team by not only skilled technicians, but also professionals with deep knowledge of industry specifics.
Thus, in 2009 Russian and Ukrainian labor market of «market staff» in many ways become a «market employer». This will stop the last few years of steady increase in wages and reduce the costs of maintaining IT staff and the development in general.
Due to significant budget cuts, 2009 will be very difficult for industry to develop customized software specialized in the financial sector. Nevertheless, this situation will open to vendors of custom software with significant industry expertise, and some new features:
- Many investment banks will be restructuring the business (number of traditional business processes will change or cease to exist), which will lead to major changes in their IT systems.
– Strengthening the legal regulation of corporations may cause a demand for supporting these changes, IT systems and technologies (including suppliers of custom software).
– In 2009, the financial sector may receive a new podsegmenta potential customers who were not previously used the services to develop custom software. For example, they can become highly specialized, small IT companies with high capitalization, offering solutions for trading, etc.
– CIO of large financial institutions to increase efforts to consolidate IT systems and IT solutions to optimize that, in some cases may lead to a concentration of services in the hands of one autsorsera.
Some promising directions for custom software development in 2009: E-Commerce, wireless and mobile technologies
– On the eve of the next «boom» of e-commerce? Customers will be concerned about even more careful control of costs, and this may affect the change in the role of different marketing channels.
In particular, one possible scenario is a serious increase in online commerce. In this case, will benefit from stable demand different solutions for e-commerce, based on off-the-shelf (OTS) platforms that do not require significant effort to setup and customization (for example, the OTS-platform company Elastic Path: http:// www.elasticpath.com).
- A breakthrough in the use of wireless technologies. Further promotion of networks 3G/4G, as well as new network technologies for household use, such as UWB and 802.11n, can lead to a significant increase in online products, providing high definition content.
- Multiplatform mobile application. With the advent of Google Android operating system market for mobile platforms become more diverse. The year 2009 can be expected to increase the intensity of work on porting and customization of products by leading developers of mobile applications.
- «Cloudy» Data Processing (Cloud computing), which is in the last few years has probably at the stage of the discussion concerned, may be used to start in real applications.
The most important use of Cloud computing paradigm in the near future – the emergence of applications, SaaS (Software as a Service), is targeted for home users, and in the corporate software market, and based on GRID computing, unified data storage on the user and the Web platforms next generation. This, in turn, can increase the need for the development of related products and technologies.