Could the Recession Be Good for Enterprise Software?

The recession has companies worldwide scrambling to rein in technology costs with desperate vendors responding in turn, offering deep license discounts, providing low-cost financing and proclaiming ever more shrilly that their products in fact save customers money.

But there is more than trench warfare going on, according to a range of observers. When the economy turns around, a number of changes, many that benefit users, will have come to the IT industry.

For example, vendors that sell software that is critical to business but don't provide customers with a competitive advantage -- such as collaboration tools -- need to adopt simpler, cheaper pricing models or face the consequences, according to Redmonk analyst Michael Coté.

"It's not like Johnson & Johnson is going to crush Colgate because they've got better e-mail," he said.

The definition of a premium product has changed as well, he added. Value-added features, especially ones that provide customers with detailed insight into costs, such as a server's power consumption, will be a must: "If it just breaks less or runs faster, people are just going to take their chances with [what they have]."

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