Companies are asking more from their software — it's now a coworker, an assistant and a morale booster.
For workers, it's a trusted hub for their daily workflow. For employers, it keeps business running through disruption and competition.
Enterprise software is the highest-growth area in IT, according to Gartner projections. Globally, businesses are expected to dole out nearly $700 billion for software this year, up 11% from last year. In 2021, spending in this category shot up 14% year over year.
During the pandemic, leaders learned to appreciate software for its role in supporting operations, said Max Silber, VP of mobility and IoT at MetTel.
"Luckily we live in an era where software enables us to deliver that business continuity," said Silber.
Lines of code allow organizations to communicate, onboard staffers, execute on projects and collaborate. During the pandemic, the role of vendors moved closer to that of a business partner, often customizing platforms to meet new, pressing needs.
In the process, software came to symbolize a place more than a tool.
"The early part of the pandemic was an area of rapid experimentation and learning," said Craig Roth, research VP at Gartner. "Where we are now is a more standard cycle of trying to rationally think about what we want to give employees, and coming up with a standard hub, a new work hub."
Productivity suites, industry-specific applications and operating systems top industry investment priorities, according to data from Spiceworks Ziff Davis. The other key areas are security software, business support applications and backup and disaster recovery tools.
How decision making shifted
Businesses were already decentralizing software use before the pandemic introduced new challenges.
"A lot of these decisions were made in a very top-down manner," said Andrew Hewitt, senior analyst at Forrester.
IT typically held power over much of the budget and decisions. But now, a clear trend emerging from the pandemic is more a shared responsibility with business leaders.
Line of business leaders mainly hold the reins over enterprise apps, with over half of all company app ownership and management in their hands, according to a report from Productiv. The company analyzed data on 30,000 applications used by 190 companies.
More buyers makes software spending control more difficult, particularly under SaaS models, known for quick deployment. Nearly one-third of SaaS software spend is currently underutilized or wasted, according to Flexera's State of ITAM 2022 report.
Despite worries over spending, leaders — in large organizations especially — are more likely to greenlight platform trials than before, said Silber.
"I've certainly seen a shift in trial and error, or adoption of software that maybe traditionally wouldn't have been considered within an organization," said Silber. Big companies realize the upside to software implementations.
What's in, what's out — and what's next
The ebb and flow of the pandemic, too, shaped software adoption over the past two years. Tools fell in and out of favor as businesses adjusted, seeking flexibility from their software deployments.
Purpose-built tools, such as contact-tracing apps designed to enable on-site work, typically won't have significant long-term use, according to Silber.
"The concept of those tools at the core can probably be reused in different formats, depending on the application," he said.
The roster of workplace applications that will stay in vogue is a familiar group. Employee-facing collaboration tools, videoconferencing, team messaging, content repositories and secure access service edge (SASE) tools all have long-term potential, said Hewitt.
It gets tricky with collaboration tools.
Most of the enterprise world continues to rationalize use — consolidating vendors or picking providers for new use cases.
Vendors are feeling the impact of this trend, as Zoom recently laid out in its fourth quarter earnings report, for the period ending Jan. 31. The company renewed its focus on multiple products and new earnings estimates signal growth won't continue at the breakneck pace of 2020 over the long term. The new revenue forecast for FY23 was between $4.53 billion and $4.55 billion, shy of analyst estimates of $4.71 billion.
As they set future goals, IT leaders will lean into slower decision making on software implementations, according to Hewitt. But worries over staff retention are also impacting what a modern software strategy looks like.
Leaders will lean into SaaS tools to meet their needs, but they're also "looking for ways to integrate all those applications together in such a way that it creates a better experience for the end user."
Beyond vendor selection, how software is implemented is the final piece of the puzzle, said Silber.
"Everything needs to be configured and provisioned over the air," he said. "We still haven't perfected that process but are making leaps and bounds to get there."