Software budgets have remained steady over the past year, despite the global recession. According to Forrester Research, enterprises planned to allocate 17 percent of their IT operating budgets toward software costs in 2009, compared to 16 percent in 2008. Small to midsize businesses (SMBs) indicated plans to allocate 19 percent of their IT budgets toward software costs in 2009, the same as in 2008.
At the same time, organizations are more inclined to seek help from local firms for their application development needs. According to Steve Soper, director of FusionStorm’s Enterprise Software Group, changes in the global economy are making offshore application development less attractive.
“After the dot-com bust, a lot of development started moving offshore to China, Russia and India in order to lower costs. While the offshore model still works in some cases, I think it’s becoming less advantageous for several reasons,” Soper said. “Due to the declining dollar and the fact that the standard of living has increased in those areas of the world, the price difference between labor here in the U.S. and offshore labor isn’t as big as it used to be.
“I also think that, over time, people have come to realize that there’s more to application development than an hourly rate. With offshore development you often face issues around communication, quality control, and a thorough understanding of the business requirements, technology frameworks, etc. For many companies, the ultimate success of their application development projects has come to outweigh any cost savings. I think this trend, and the importance of quality software, is reflected in software budgets today.”
Experience Counts
FusionStorm has delivered high-quality enterprise application development for more than a decade, completing high-profile, multi-million-dollar projects for some of the world’s largest organizations, as well as smaller solutions for SMBs. Traditionally, the FusionStorm application development team focused on database applications. However, FusionStorm has remained abreast of key software development trends, and now utilizes more open-source frameworks such as J2EE.
“While in the past a lot of our application development was done on proprietary types of frameworks like BEA or WebSphere, you now have a proliferation of open-source tools ranging from Eclipse IDE to Tomcat and Apache and various application servers,” Soper said. “Every day more open-source tools become available that get closer to what some of the enterprise packages allow you to do. As these tools have become more full-featured over time, we have begun to take advantage of them for our customers’ projects.”
Adoption of open-source software is becoming pervasive according to Gartner, with at least 85 percent of companies surveyed currently using it in their enterprises. When asked to select the top three reasons for using open-source software, respondents cited lower total cost of ownership, reduction in software development costs, and the flexibility to embark on new IT projects or software initiatives.
“The value of open source lies in the freedoms inherent in the licensing scheme. It creates a free-market paradigm that drives down costs while encouraging innovation. It also reduces vendor lock-in and speeds time to market. FusionStorm’s application development team has the skills and experience to help customers take advantage of these benefits,” Soper said.
Opening the Door
Organizations are using open-source solutions to update key legacy applications and reduce maintenance and support costs. Modernizing key legacy applications is a top software initiative for businesses, according to Forrester Research, because the associated operational costs have become unsustainable.
"By freeing up money from software budgets, IT departments will be able to support more innovative projects across their organizations," said Ray Wang, vice president and principal analyst at Forrester. "Right now, every bit of competitive advantage can help, so focusing on activities that cut overall operations costs or develop better customer offerings is paramount."
Updating key legacy applications was cited as the top software initiative by 64 percent of enterprises and 55 percent of SMBs surveyed by Forrester. More than one-quarter of enterprises and more than one-fifth of SMBs said that updating and modernizing key legacy applications is very important. Eighty-one percent of enterprises consider reducing IT costs to be an important goal, with improving application integration not too far behind at 77 percent. Seventy-one percent of SMBs consider improving integration to be important, with reducing IT costs and using information technologies to increase innovation next.
“This is where FusionStorm’s large-scale application development experience, as well as our engineering expertise in multiple platforms, comes into play,” Soper said. “We help customers bring all these pieces together to reduce costs, improve productivity, and maximize customer service.”
Package Deal
When implementing a major application, a packaged application or application modules are the most-preferred deployment options for 33 percent of enterprises and 45 percent of SMBs, according to the Forrester survey. The next-preferred option for both is a tailored solution assembled from existing custom and packaged application modules.
“It obviously makes sense to use packaged solutions wherever possible rather than reinventing the wheel. However, packaged solutions may not make sense if they require you to create workarounds within your business processes,” said Soper. “We can take a framework such as Microsoft SharePoint and create a custom solution tailored to your business needs. Within that custom solution we can let users manipulate data in formats and applications they’re used to working with, such as Excel and Word, while also working collaboratively and aggregating multiple data sets. We’re actively working on these types of hybrid solutions both internally and for our customers.”
In addition to reducing costs and speeding application development time, such hybrid solutions allow for a great deal of flexibility in application delivery. FusionStorm can create solutions that can easily be deployed within virtualized environments and accessed via mobile devices or standard Web browsers.
“The key here is separating application functionality from a particular hardware platform, a particular development framework, and a particular endpoint device,” Soper said. “Our team can help you leverage today’s open-source tools, portals and mobility solutions to help you get the most from your software budget.”