Engineering software faces bleak outlook and lower costs

The engineering specialist is reluctant to make many predictions for 2009, although it does state “all indications are that it will be a tough year for developers and their customers, as global economic conditions continue to be in a state of flux”. Cambashi analyst Nic k Ballard comments: “From past experience in a downturn, it takes a few months for the effects to be seen in the revenues of major ISVs and their markets, and at least 18 months for things to bottom-out. “This downturn is somewhat different in that capital for investment dried-up very quickly, as the banks struggled to balance their own books. Users with little free cash flow will place investment plans under scrutiny, limiting the scope for genuine new software sales.” Ballard concedes that use of engineering software for rapid product development and manufacture is so much part of industry these days that users can’t simply turn off the tap – concluding that maintenance revenues are likely to hold up. But he adds: “As new business becomes increasingly competitive, and software margins for vendors are still high, we expect that real software prices are going to fall – not necessarily list prices, but through offers, bundles and special discounts for upgrades and cross-grades.”