Software gives one's business the edge and organizations are expected to spend more on Enterprise Software this year

While deploying IT infrastructure in the enterprise, a CIO makes some big decisions about software. Should the platform be Windows NT/2000 or Unix/Linux? Which product brands are the most suitable for various enterprise applications? What about middleware? Then there is the issue of tying in new (Web) applications with legacy systems.

The survey shows that Enterprise Software is certainly the key focus area for CIOs. However, the budget allocated for this category is substantially lower.

Around 41 percent of respondents said Enterprise Software is the main focus area for 2002-03. This puts Enterprise Software in the top three areas of the current IT budget. Some 79 percent of respondents say their requirement for Enterprise Software has increased over last year. The average rate of increase in Enterprise Software requirement is 32 percent.

We have divided the Enterprise Software category into seven infrastructure segments: RDBMS, Network Operating System (NOS), Application servers, Backoffice applications, Network/Enterprise infrastructure management solutions, Testing & Troubleshooting tools, and Knowledge Management (KM) solutions.

Of these seven infrastructure segments, the main requirements this year are for RDBMS, Application servers and Network/Enterprise infrastructure management solutions. Application servers comprise of Web server, Proxy server and Mail server. For 2002-03 we see that 46 percent of companies need RDBMS, 43 percent need Application servers and 40 percent require Network/ Enterprise infrastructure management solutions. This is followed by KM solutions (36 percent), NOS (32 percent), Backoffice applications (26 percent), and Testing & Troubleshooting tools (19 percent).

While the requirement across almost all areas is more or less constant, the rising star is KM applications. At present 31 percent of the respondents said they use KM applications and 36 percent said they plan to go in for a KM application this year.

A CIO knows that knowledge accumulated from market research, customer interaction, individuals, or just past experience can give his business the competitive edge, help avoid past mistakes, reduce costs and training cycles, and streamline operations.

But knowledge is scattered around—it lies in the minds of employees, in filing cabinets, on hard disk drives of various servers and desktops, on websites, in e-mail boxes or just about any other data store. In this state, knowledge is accessible to a few individuals who are aware of its existence and location. But if this knowledge was in a central repository, accessible to everyone, it would certainly present the benefits mentioned earlier.

Most enterprises already have different versions of some or all these enterprise applications. In 2002-03 spending is likely to be more on upgrades or for buying additional licenses.

Increased allocation
The average funds allocated for Enterprise Software has gone up from Rs 77 lakh to Rs 102 lakh. More specifically, there is no change in spending on Enterprise Software among companies who invest up to Rs 25 lakh in it. About 30 percent of the companies fall in this bracket.

While interest in Enterprise Software has increased, this is certainly not a high area of investment, if you go by averages. On an average, companies are spending the lowest on Enterprise Software and Security compared to other categories.
The budget allocation trends across various industry segments indicate that all segments are giving high priority to Enterprise Software.

Outlook
Despite a minor increase in budget allocated this year, Enterprise Software is the number one focus area for CIOs.

This year the budget allocated for this category is more likely to be spent on incremental upgrades or for buying additional licenses. The new area of interest is Knowledge Manageent solutions, and CIOs in both knowledge-based as well as
traditional industries plan to go in for a Knowledge Management solution.

Many companies from the IT/Telecom sector are going to invest heavily in Enterprise Software.

Research Snapshots Enterprise Software is in the top three key areas of the current IT budget 79 percent of respondents say their requirement for Enterprise Software has increased over last year The main requirements this year are for RDBMS, Application servers and Network/Enterprise infrastructure management solutions Knowledge Management is the rising star. 36 percent said they plan to go in for a KM application this year Average funds allocated for Enterprise Software has gone up from Rs 77 lakh to Rs 102 lakh

Top 5 benefits CIOs seek Improvement in operational efficiency Better customer service Better data management Better connectivity with regional offices Revenue benefits