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How Software Customers Choose Vendors in a Consolidating Market

  • February 01 2006, 1:00am EST

According to a newly published IDC study, customers' criteria for selecting software vendors are shifting away from product simplicity and pure innovation, and moving toward specific business solutions that are pre-integrated and interoperable. The study, which analyzes the results of ten recent IDC surveys, finds that customers perceive themselves to be in the driver's seat as they create a new natural selection dynamic for the software industry.

The study identified the following top three criteria increasingly used by customers to select a vendor:

  1. Understanding of the customer's business and providing solutions that integrate and interoperate in their environment;
  2. Best-of-breed features with superior quality; and
  3. Price and value advantages.

IDC predicts that the top three selection criteria - solutions, business orientation and best-of-breed features - will ultimately yield advantage for vendors perceived as software brokers. Conversely, there will be a marginal disadvantage for vendors that continue to approach the market as pure-play software publishers. The software broker is the purveyor of real business-savvy software that cuts through the complexity crisis, as described in the IDC study, Software Companies of the Future (June 2005).

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