Interesting public market perspective on the software industry, and on Software's New Economic Drivers By Rick Sherlund (Goldman Sachs).
- The macroeconomic influence on tech is greater than ever as tech has grown to
become the single largest component of corporate capital spending - now almost 40% of the total.
- IT spending was able to well outpace economic growth as it grew as a proportion of GDP from 1.5% in 1970 to almost 5% in 2000. Since settling in at less than 4% in recent years, tech is likely to resume growing as a percentage of the economy, but not nearly at the rate of decades past.
- Not surprisingly then, the correlation of IT with the broader economy has jumped from less than 0.1 in the 1970s to over 0.9 in recent years as the industry has matured.
Also several interesting trend analysis:
(1) Of all tech trends, wireless's impact will be broadest
(2) China and India are altering both supply and demand formulae
(3) The low-end unit epidemic is distorting revenue realities
(4) With drivers escalating, security is at an earlier stage than the consensus view
(5) Even at this stage, spending is still consolidating around fewer, larger vendors
(6) Internet treasure chest now being unlocked
(7) Open source opening Pandora's box on pricing throughout the IT stack
(8) The true digital home will be longer in coming than expected
(9) SOAs shake up the software industry