The growing usage of Software-as-a-Service, or SaaS-based, applications in the enterprise means that software will displace traditional services to account for almost half of all Big Data revenues by the middle of next decade, Wikibon CTO David Floyer asserted in a new interview.
Speaking to SiliconANGLE ahead of the publication of Wikibon’s Big Data Vendor Revenue and Market Forecast later this month, Floyer revealed that his estimates show software is set to account for 47 percent of all Big Data revenues by 2026, compared to just 22 percent in 2013.
According to Floyer, this stunning growth in Big Data software revenues is inevitable due to the coming proliferation of SaaS-based applications in the enterprise that are expected to subsume traditional services.
“The rise of applications will be a combination of end-use spend on data sources, applications & skills,” Floyer said. “A significant portion of these Big Data applications & data sources will be SaaS-based.”
Gazing into his crystal ball, Floyer (pictured) said there may well be a need to expand the definition “Big Data software”, as he predicts the majority of developmental Big Data models would be SaaS-based in the next decade. As such, Floyer expressed his belief that the monitoring of operational Big Data models, a subset of the developmental models using high-performance hardware & software, will also inevitably be SaaS-based too.
Floyer said that most of these models would be hosted in operational public and private clouds for latency reasons, and that this would allow Big Data-focused independent software vendors (ISVs) to charge for hardware, software and services as just “software” in the future, resulting in a massive increase in overall Big Data software revenues.
“The operational models will provide the majority of enterprise ROI for Big Data,” Floyer said. “The ISVs will have enormous business pressure to simplify the services side with software solutions and extensions.”
Floyer said that both traditional ISVs, like IBM, Oracle and SAP SE, as well as cloud-based vendors like Salesforce.com, Inc., and Workday Inc., would be compelled to respond to this changing dynamic. Most likely they’ll do so by moving into Big Data extensions for databases, applications and data sources, all of which will likely be delivered via SaaS on private and public clouds, Floyer said.
“The net result of this is that a high proportion of traditional services will be delivered as software in the future,” Floyer said.
Traditionally, Big Data projects have required higher than average spending on services due to the complexity of software such as Hadoop. This trend has somewhat limited spending in the space and suppressed return on investment according to many observers.