What is Happening? While there are a number of important software industry trends that ebb and flow through time, the advent of the Cloud is clearly encouraging many technology providers to go vertical and emphasize solutions – as technology decisions are increasingly made at the functional and business unit level (where the underlying technology infrastructure will often be hidden from the buyer). This trend was clearly in evidence at IBM’s annual Software Analyst Connect event at the Hilton in Stamford, CT earlier this week – which was entitled “Smarter Software: Driving new capabilities, new markets, new models & new buyers.” To net it down, IBM is increasingly focusing its selling message and product development around customer business objectives, required capabilities and outcomes, rather than on technology products per se.

Saugatuck believes that this broader trend toward business outcomes and vertical go-to-market strategies applies across many software and solution provider categories. For example, recent briefings with offshore outsourcers and system integrators clearly supports this trend (click on reports here and here, published Nov. 29), as well as refreshed go-to market approaches by major application providers such as Infor, who are now emphasizing a vertical market value proposition (thus reducing the complexity of their legacy brands). In the case of IBM, it is clearly putting investment weight (in the form of significant M&A activity) behind this important shift in go-to-market strategy and position, at the same time that it aligns the broad range of internal teams required to successfully support the change in direction.

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