Software Sales growing faster than other IT segments in 2007?
I always thought it was a good time to be in software sales, but now it is not just my "gut instincts" . Revenue for the software segment is forecasted to grow faster than the rest of the IT industry, according to a new report from Forrester Research.
Forrester begins with the "Big Picture" in that they see the US economy slowing down in 2007. As a result they expect IT sales to reach only a 5 percent growth rate, which is the lowest since 2003. What does this mean to Software sales people? This domino theory states that since the US is the largest single technology buying market in the world, this slow down will depress sales not just here in the US but also elsewhere especially where US companies are outsourcing.
After an incredible 12 percent growth in 2006, the slowing US economy will impact negativly both the Asian economic growth and IT purchases, resulting in only a 4 percent growth this year. In the past high growth in the EMEA regions has provided a buffer for high tech firms when US sales have not been strong. Not now, the EMEA region has had a steady but slow growth, however it will still result in only a 5 percent overall growth, which is not enough to boost the US.
Forrester claims this current situation is a "caution flag for IT vendors because 2007 will be a challenging environment". Their assumption is that worldwide prospects for IT sales will be rather grim.
Here are Forrester's 2007 predictions:
- Global IT purchases: up only 5 percent to $1.55 trillion, compared with 8 percent growth in 2006
- Global IT spending (personnel, facilities, etc.): up only 6 percent to $2.02 trillion, compared with 8 percent growth in 2006
- U.S. IT purchases: up only 5 percent to $527 billion, compared with 6 percent growth in 2006
- U.S. IT spending: up only 5 percent to 761 billion, compared with 6 percent growth in 2006
So why am I toting that it's a great time to be a software salesperson? Well, there is one segment of this IT market that is growing fast- and you guessed it -SOFTWARE! Forrester predicts that software purchases will do better than average growing 7 percent. I know, that's down from the 10% growth we saw in 2006 but it’s still more than a third faster than the rest of the IT industry. Plus where there's software, there is services to implement software, so expect the services industry to benefit from this uptick. I will do some research to find what kind of software is expecting the most growth and follow up in another blog later.....
Happy Selling!
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