Apps stores may succeed at the expense of SaaS

New Zealand Computer Society CEO Paul Matthews says 2011 threatens to be another year of major change for the ICT sector in New Zealand and abroad, but not necessarily as expected. So, what does he think the year will really bring? Here are his top predictions for 2011.

Shift in distribution of software

As most will know, Apple recently released its new AppStore, bringing easy application browsing, purchase, licensing and updating to its desktop platform. The significance of this on the software sector has been largely overlooked, however.

Up until now, the step between developing a product and successfully marketing and distributing it has been large. In 2011 the AppStore and the equivalent Windows software marketplace (of which several big names such as Intel, Amazon and Microsoft are scrambling to put in place) will significantly change the way software is marketed and distributed, a change felt throughout the software sector.

And this will have some pretty major flow-ons. For instance, many haven't yet cottoned on to the fact that these distribution mechanisms are effectively in direct competition with SaaS. If they succeed, much of their success will be at the expense of SaaS-based software. On top of this, the whole pricing model for software will change in these markets, with developers "racing to the bottom" and chopping prices (in exchange for access to significant volume). This will create major challenges for the software sector.

Combining the ease of finding, purchasing, installing and updating software with an across-the-board re-calibration downwards of software pricing, it's inevitable that SaaS adoption will take a hit in 2011 as will more traditional software distribution channels.