Software Companies Expect Cloud Computing to Drive Industry Growth in 2011: Survey

By Nathan Eddy  |  Print this article Print

The survey of software company CEOs and CFOs highlights the challenges and opportunities in the cloud computing space.

The cloud is where it's at—or so suggested a Sand Hill Group survey set to be released later this week. The report shows that the majority of the more than 100 software company CEOs and CFOs interviewed believe cloud computing and Software-as-a-Service (SaaS) will drive the largest amount of spending in the software industry over the next 12 months. The report also found that the majority of respondents expect their company's business will grow by at least 20 percent in 2011 and that hiring will increase significantly.

The survey revealed that the resounding majority of respondents feel cloud computing and SaaS/on-demand will be the two most frequent types of software projects driving business spending over the next 12 months. More than 50 percent of the respondents stated the biggest influence driving software spending would be the need to increase efficiencies and reduce costs. Approximately 90 percent of the companies surveyed expect their headcount to increase in 2011, with more than half of those companies expecting their headcount to increase "significantly" this year.

The report also found that more than 90 percent of the software executives responding have a positive opinion regarding the industry outlook. In addition, nearly three-quarters of the executives expect the software industry will perform better than in 2010. In addition, the survey indicated software vendors have increased their use of cloud deployment options over the past year and decreased their use of on-premises options. In addition, a clear majority (72 percent) of the surveyed executives stated that multi-tenant SaaS solutions via a subscription license is the type of offering that will be most desirable for new customers during the next 12 months.

While many industries continue to struggle, the CEOs and CFOs participating in Software Outlook 2011 are optimistic about the industry as a whole and extremely bullish on the outlook for their own companies. Well over three-quarters of the respondents noted that their company had already returned to pre-recession growth levels or would reach those levels in 2011. In addition, nearly two-thirds of the respondents expect their company to grow by at least 20 percent, including more than one quarter of the respondents who expect their growth rate to top 50 percent this year.