Spending More on Cloud and Enterprise Apps?
Rampant inflation and increased geopolitical risks have created uncertainty and fear in many industries worldwide. As a result, many are scaling back their efforts and cutting costs. Tech departments are no exception. Companies throughout the industry have been announcing layoffs left and right, and they frequently include jobs in tech. However, these layoffs don’t tell the whole story. Software spending is expected to grow everywhere and by a relatively large margin.
The Need for Modernization
The world of business has changed a lot recently. For one thing, there’s a lot more use of remote and hybrid work models. And as the economy squeezes companies worldwide, even more of them will start looking at these work models to reduce overhead. These models require much better-customized software than most companies currently possess, software that can easily coordinate workers at many different locations without any loss of efficiency or communication problems.
Customer expectations are changing, as well. Today’s customers have no patience at all for downtime. When they want to use an app, they expect it to be working, and when they want to access their data, they expect it to be available no matter what. Customers also what new innovative ways to make the process of utilizing the software easier, which means constant refinement and customization. Companies that want to stay competitive must update their software and data storage to ensure customers get what they want. Or those customers will go to their competitors.
Growth Driven by the Cloud
A lot of the growth in software spending is driven by cloud technology. Many companies out there have legacy enterprise applications that are in dire need of modernization. Cloud technology provides an easy, effective tool for modernizing them. By putting these applications on the cloud, businesses ensure that their employees can seamlessly work together remotely, that customers can always access their favorite apps, and that data can be streamed in real time so executives can make better decisions regarding customers and products. Cloud computing also makes data storage safer, makes disaster recovery more manageable, and improves data analytics. The challenge with migrating legacy enterprise applications to the cloud is that these often need to be refactored or redesigned so the architecture of the application can work in a cloud-based environment.
In other words, enterprise applications that run on cloud computing give any business an edge in several ways. It would not be a very smart business decision for any company to ignore it. And that is why spending will keep increasing on cloud and enterprise applications, no matter how horrible inflation gets and how high geopolitical risks grow. Companies can’t afford to not make investments in these areas.
CRM Software Performance
Customer relationship management software, or CRM software, is set to grow more than any other kind of software spending. With cloud-based CRM, companies can quickly and effortlessly collaborate on customer data analysis with people in different locations. They won’t need to host the tools on the company’s computers. And, best of all, it does away with the data siloing problem.
The ability to analyze customer data quickly and easily, improve customer relations, and increase sales is why spending on CRM software is forecasted to grow by 11.9% over the coming year. For a $64 billion industry, that makes for a hefty-sized spend.
ERP Software Performance
Enterprise resource planning, or ERP, software is also set to grow well despite current market difficulties. Those market difficulties make an investment in ERP development even more attractive for some companies.
ERP software integrates and streamlines business processes across different departments. This makes communication and coordination between the other departments a lot easier. That, in turn, increases both efficiency and productivity. And that is why ERP spending grows even when IT spending is often otherwise set to decrease. ERP spending is expected to increase by 10.4%.
Where the Layoffs Are Aimed
Massive layoffs are happening. Just look at Groupon’s recent announcement. It’s laying off 15% of its workforce, but most of those layoffs are in departments like sales, marketing, and recruiting. It intends to focus “only on mission-critical activities and leaning on more external support.” This is a typical attitude for industries worldwide. This is why these tech layoffs, by and large, won’t affect software engineers. Software engineers are still needed. As companies cut spending elsewhere and face financial losses, software engineers are becoming more critical than ever.
The Future Is Software
Information technology is resistant to the cuts seen in most industries worldwide. And software spending will grow twice as fast as other IT spending. No matter how bad the economy gets, you can look to software engineering to help businesses meet the demands of a bad economy by assisting them to do more with less.
Sonatafy Technology is a leading nearshore software development company that is headquartered in the US and has over 130 engineers throughout Latin America. If interested in learning more, click here.
