Software Development Trends Survey Results 2011

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2011 Software Development TrendsSurvey Results

Copyright 2011ExecutiveBrief

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Table of Contents

Introduction 2

Key Findings and Takeaways 2

Respondent Pro le 3

The Software Development Environment 6

Third Party Interaction and Resources 12

SaaS/Cloud Applications 15

Mobile Applications 18

Future Business Outlook 21

Greatest Potential Impact to your Business in 2011 24

About ExecutiveBrief 27


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2011 Software Development Trends: Survey Results

Introduction

IntroductionThe ExecutiveBrief 2011 Software Development Trends Survey was conducted from June6 through June 30 of 2011, with of cial results and analysis published in August 2011 inExecutiveBrief ( www.executivebrief.com ).

As with previous annual surveys, this survey is intended to inform senior business leaders andindustry professionals of common and prevailing trends, along with key priorities reported amongtheir peers throughout the spectrum of the software development industry.

Approximately 300 software industry business leaders and software development professionalsparticipated in this survey. The survey consisted of a detailed series of key questions, the majorityof which were multiple choice with options for alternate inputs. There was one open-endedquestion soliciting the respondents thoughts on the greatest potential software development trendwhich may impact their business in 2011.

ExecutiveBrief conducts this survey annually. To participate in the 2012 survey, check theExecutiveBrief website for details in the early months of 2012.

Key Findings and TakeawaysSeventy-nine percent (79%) of respondents indicated their software development budgets wouldincrease in 2011; with nearly half indicating their budget is likely to grow greater than 10% ascompared to last year. Only 5.2% believed their 2011 budget would decrease by 10% or more ascompared to 2010. This is an even more bullish outlook for budget growth than reported in 2010.

Hiring continues to be a priority with over half (54.3%) of all respondents indicating they plan toadd permanent staff in the second half of 2011 and 2012. That is roughly the same response as in

the 2010 survey. Almost 86% of respondents surveyed identi ed their organizations current top priority being newproduct and application development. Thats up from 70% of respondents surveyed last year. Thisdemonstrates continued commitment to the core mission of developing new applications.

Survey data indicates growing interest and early-market activity in SaaS/Cloud and mobileapplications. The majority of respondents indicated business case planning, solution architecture,and implementation as their greatest challenges and need for assistance.

Priority among respondents remains improving quality and user experience. This is consistent withlast years survey and a sign of a growing and competitive software development marketplace.
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Respondent Pro le

Respondent Pro leBefore we present results from the 2011 survey, its important to understand the pro le of peoplewho responded to survey questions. With this understanding, we can better appreciate andanalyze their response.

Similar to the 2010 survey, approximately two-thirds of all respondents identi ed themselvesas being part of senior and executive management, with a quarter of all respondents identifyingthemselves as having strategic and duciary responsibilities. These are signi cant groups to weighas we look further into survey data and analyze responses on business challenges and industry

outlook. Another large group of respondents indenti ed themselves as being involved in the technicalaspects of software development a little over 19% described themselves as part of technicalmanagement, engineering, and related consultative services.

As with last years survey, 2011 respondents are professionals either predominately involved instrategic business decisions with regard to software development or directly implementing thosedecisions.

What is your vantage point of viewing the current statusand trends within the Software Development Industry?

Advisory: Consultant, Business Analyst, Systems Architect, Industry Analyst

Engineering: Software Developer, Quality Control, Research & Development

Supporting: User Support, Technical Writing, Training

Supervisory: Technical Lead, Development Manager, Project Manager, Engagement Manager

Sales & Marketing: Sales Representative, Sales or Marketing Manager/Director

Business Leader: Vice President/Director/Manager of Software Development, IT, Engineering, Operations, etc.

Strategic/Fiduciary Responsibility: C-Level Executive, Board Member, Investor

33.1%

41.9%

4.9%

8.1%

0.7%5.3%

6.0%


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Respondent Pro le

To gain a more complete perspective of the survey results, it is also important to understand thetypes of organizations these business leaders and software professionals represent.

As in the 2010 survey, the largest group of 2011 survey respondents identi ed themselves asIndependent Software Vendors (ISVs), whose core business is software development. This grouprepresents nearly 60% of all respondents.

Software as a Service (SaaS) providers continue to be well represented in our trends report, with40% describing their organization as such. Small to Medium Enterprise organizations (SME) madeup a little over 38% of respondents, nearly 10% greater than last year.

As with last years report, it is understood there is a degree of potential overlap in organizationsidentifying themselves as ISVs, SMEs or large enterprise as respondents were allowed to selectmore than one description of the type of organization they represent.

Similar to the 2010 survey, the smallest representative segment of responses came from thirdparty organizations, such as analyst organizations, consultants, the investment community, andeducation.

Organization type

57.7%

6.3%

0.7%

1.1%

4.9%

15.8%

38.4%

13.0%

45.1%

% of respondents

0 10 20 30 40 50 60

Other

A Computer Science or Engineering Education Provider

A Venture Capital Investment Firm/Groupfor Portfolio Software Companies

An IT Analyst Organization

An Enterprise Organization of greater than 500 employeesthat develops in-house software applications/systems

A Software Development Consulting Firm

A Small to Medium Enterprise (SME) organizationof less than 500 employees

A Software as a Service (SaaS) Provider

An Independent Software Vendor (ISV) (of any size)


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Respondent Pro le

Just as we saw with role types in the previous chart, the overwhelming majority of respondents tothe 2011 survey offered their response from the perspective of active participant in the softwaredevelopment business.

As the chart above indicates, there is no clear majority of markets or industries served. Whilehealthcare and life sciences was selected by more respondents than any other available choice,respondents continue to serve a broad range of industries.

In a change from last years survey, respondents were given the choice of indicating they servedany addressable market. Approximately 30% chose this response, possibly indicating interest inrepurposing technology and porting applications from one market to another.

Respondents were allowed to select all markets they are active in software development.

This data compares well to the 2010 survey, without any signi cant change to the prioritization ofmarkets or industries served.

What vertical markets or industries does your company serve?

% of respondents

0 5 10 15 20 25 30 35Other

Agriculture

Packaged Goods

Construction

Automotive

Travel, Transportation & Hospitality

Media & Information Services

InsuranceEnergy, Resources & Utilities

Manufacturing

Telecom

Education

Retail & Consumer

Government

High Tech

Banking & Financial Services

Healthcare & Life Sciences

Any Target Market 29.9%

31.1%

23.1%

20.1%

19.3%

17.8%

14.8%

13.6%

13.3%

12.9%

12.5%

11.0%

8.3%

6.8%

6.1%

6.1%

3.4%

8.0%


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The Software Development Environment

When asked which software development area a respondents organization most needed toimprove, survey results were consistent with last years data. Priorities remain improving qualityand user experience. This is often a sign of a rapidly growing and competitive marketplace.

Need for improvement in software architecture remained low, as did maintenance and support,security, and compliance.

Looking at response to this question and combining it with others in the survey, a reasonableconclusion is there continues to be more emphasis placed on customers and users of applications.This may support conclusions drawn elsewhere in this report of a continued bullish outlook forsoftware development and the ramp-up of new marketing initiatives.

In what Software Developmental Area(s) does your organizationneed the greatest improvement?

% of respondents

0 10 20 30 40 50

Other

Compliance

Privacy and Security

Maintenance and Support

System Architecture

Customer / User Relationship Management

User Training

Process Modeling

Coding / Construction / Integration

Implementation / Deployment

Project Management

Project Scope and Estimation

Business Analysis

Requirements Definition

User Interface Design

Quality Assurance / Quality Control 41.9%

39.3%

31.6%

31.2%

27.4%

26.1%

16.7%

15.0%

14.5%

13.7%

13.2%

12.8%

12.0%

4.7%

3.0%

2.1%


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When looking at areas for greatest improvement, its interesting to put the responses in the contextof the organizations primary software development focus.

With no single response earning a majority, respondents indicate broad interest and ranging focusin contemporary software development markets.

It is interesting to note while social media and networking have enjoyed rapid growth in popularityamong users and the investment community, respondents rated it low as a priority and area offocus. This may signal a limit to the demand for new social networking applications and a level ofmarket saturation. It is certainly an area to monitor in future surveys.

Graphics-intensive and gaming environments continued to rank low in response, a continuingtrend, as noted in our 2010 report.

Where is the majority of your organizations software development workfocused or primarily deployed?

% of respondents0 5 10 15 20 25

Other

Media Software

VOIPInsurance

Video / Imaging / Graphics / Animation

Social Networking

Marketing Automation

Security

Education / Learning Software

HR

Supply Chain Management

Online Analytics

ERPCMS / Web Publishing

Inventory / Asset Management

Document Management

Programming Software / Software Development Tools / Platform

E-Commerce

CRM

Communication / Networking / IT Tools

Project / Process Management

Healthcare

Financial

Data Storage / Management / BI 20.4%

19.3%

18.9%

18.1%

17.8%

15.2%

15.2%

15.2%

14.4%

13.0%

12.6%

11.9%

11.5%

11.1%

9.3%

8.5%

8.5%

7.8%

7.4%

7.4%

5.6%

5.6%

2.2%

9.3%


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When asked about the respondents software product and application development platform,the majority responded Internet/Web, with Enterprise Applications ranking high as well. Desktopapplications earned a notable response and Embedded ranked lowest. There is no signi cantchange compared to last years data.

Compared to 2010 response, the greatest change in platform use is SaaS/Cloud and Mobile/

Handheld. SaaS/Cloud increased from 38.7% to 54.1% and Mobile/Handheld increased from29% to 42.1%. Both increases are signi cant. Combined with data elsewhere in this report, areasonable conclusion is cloud and mobile applications are gaining interest and support.

What is your company's software product/applicationdevelopment platform?

% of respondents0 10 20 30 40 50 60 70 80

Other

Embedded

Mobile / Handheld

Desktop Applications

Enterprise Applications

SaaS / Cloud

Internet / Web 66.5%

54.1%

53.4%

48.5%

42.1%

10.5%

1.9%


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Looking deeper into the software development environment, we surveyed which speci cdevelopment methodologies or models are most popular and in use.

Agiles popularity and dominance continues.

Agile continued its dominance as the software development methodology of choice, with over one-half selecting its use as a preferred method. Iterative once again took the number two spot andWaterfall again placed third.

There were no signi cant differences between 2010 and 2011 survey data, suggesting stability insoftware development methodologies and models.

What is your preferred Software Developmentmethodology/model?

Agile

Iterative

Waterfall Process

RAD

RUP

XP: Extreme Programming

V-Model

Other

56.5%

9.2% 1.9%

9.2%

0.8%

2.3%

4.6%

15.6%




In terms of which programming languages, programming environments, and frameworks weremost common, Microsoft.NET, SQL and the C-family again share top honors.

Python, Ruby, and Perl remain least preferred.

There were no signi cant changes in response for all languages, environments, and frameworks,from 2010 to 2011.

What are your organizations preferred developmentlanguages/environments/frameworks?

% of respondents

0 10 20 30 40 50 60 70 80

Other

Ruby

Perl

Python

PHP

AJAX

XML

JAVA

JavaScript

HTML

SQL

Microsoft .NET

C, C++, C# 61.1%

59.5%

56.9%

48.9%

48.1%

46.9%

44.7%

37.8%

18.3%

9.9%

6.5%

5.7%

10.7%



Third Party Interaction and Resources

Third Party Interaction and ResourcesWe surveyed respondents on how much of their software development work-load is performedin-house versus external personnel and resources, ranging from consulting services to formaloutsourcing.

Responding to the question of the use of outsourcing, a little over half of all respondents answeredthey handle software development 100% in-house. This continues a trend noted last year andstatistically matches last years results.

Only 1.5% of respondents reported they outsource everything, leaving approximately one-half ofsoftware development organizations doing some degree of outsourcing. This too deviates littlefrom last years response.

As noted in last years report, it is hard to tell if the increase in in-house software development isa temporary condition or trend. Given continued economic challenges, it is possible that reducedoutsourcing is due to existing human resource capacity within organizations.

As with the 2010 survey, 2011 survey results support greater emphasis on new applications, hiring,and budget increases.

This continues to be an area of software development to watch. As organizations grow and theeconomy improves, we may see a swing back to an increase in outsourcing as businesses seekways to move faster in given markets.

Approximately what percentage of your organizations software development

is done in-house versus Outsourced to a third partysoftware development organization?

100% in-house

> 90% in-house, < 10% Outsourced

> 75% in-house, < 25% Outsourced

50% in-house, 50% Outsourced

< 25% in-house, > 75% Outsourced

100% Outsourced

52.3%

25.6%

10.7%

7.6%

2.3%1.5%




Respondents who answered positively to outsourcing were further asked about their outsourcingmodel whether their third-party partners were onshore or offshore, whether they used onevendor or multiple vendors, or any of the combinations thereof.

Results from the 2011 survey matched those in 2010. The largest group was again found tobe the model of having third-party vendors both onshore and offshore, keeping some softwaredevelopment nearby.

The second largest group was once again the model of using a single off-shore softwaredevelopment partner. This group appears to continue to provide good value, quality, and loyalbusiness relationships.

Onshore and offshore multi-source is the least employed business model reported. This slightlydiffers from 2010 data and is an area to monitor. A bias toward single-source may indicate a trendvaluing fewer, more deeply involved business relationships.

If you currently use Outsourced software development services,or have used them in the past,

or are considering using them in the future,your outsourcing model is:

Both onshore and offshore

Offshore, Multi-Source

Offshore, Single-Source

Onshore, Multi-Source

Onshore, Single-Source

17.9%

15.4%

20.3%

13.8%

32.5%




Continuing with those organizations that utilize offshore outsourcing vendors, India remains the topdestination by a wide margin nearly 70% of respondents who offshore do so with India vendors.This data is effectively the same as surveyed in 2010.

As in 2010, Ukraine, Eastern Europe, and Russia remain strongly supported with a combined36.1% of respondents outsourcing to those markets.

Mexico and Latin America once again gained support in 2011, from 10.2% in 2010 to 16.9%in 2011. This is the second year this trend has been noted and is something to watch in futurereports.

Southeast Asia offshoring increased in 2011 as well, from 8.4% in 2010 to 15.7% in 2011.

If you use Outsourced and Offshore software development services,where are their development centers located?

% of respondents

0 10 20 30 40 50 60 70 80

Other

Canada

Australia / New Zealand

Ukraine

Romania

Russia

China

Other Southeast Asia / Pacific

Other Eastern Europe

Latin America / Mexico / Brazil

India 68.7%

16.9%

15.7%

15.7%

13.3%

12.0%

8.4%

8.4%

7.2%

7.2%

16.9%


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SaaS/Cloud Applications

Re ecting the relatively balanced stage of SaaS/Cloud activity, respondents were fairly even intheir response to the greatest challenge they face within their respective SaaS/Cloud development.Responses were evenly given among challenges ranging from de ning bene ts and ROI, security,support, and user experience. Architecture and QA/QC were concerns, but notably less so thanothers.

Combining response to this question with the previous question on stage of development, itappears the majority of respondents are in the early phase of SaaS/Cloud application development working through the challenges of user experience and associated tangible bene ts, as well as apursuable ROI.

There is no comparative 2010 survey data.

What elements within a SaaS/Cloud project or applicationdoes your company find most challenging?

% of respondents0 5 10 15 20 25 30 35

Other

QA/QC

Architecture

User Experience

Operation and Support

Security

Defining tangible benefits andReturn on Investment

33.2%

32.1%

31.6%

31.6%

25.8%

14.2%

5.8%


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Mobile Applications

Mobile Applications As with increasing consumer interest in SaaS/Cloud applications, we asked respondents a numberof questions regarding their mobility plans and activities.

Asked about their stage of development relative to mobile applications, the majority (47.8%)reported developing and implementing as their current stage.

Pointing to the early stages of a growing market, 19% identi ed maintaining and supporting mobileapplications as their current stage.


At what stage is your companyin developing Mobile applications?

Defining Mobility strategy

Developing and implementing Mobile applications

Maintaining and supporting Mobile applications

47.8%

33.2%

19.0%



Mobile Applications

Response to the question of the most challenging issue facing mobile application developmentwas interesting; with 36.3% indicating the de nition of tangible bene ts and ROI is the greatestchallenge and 32.2% identifying solution architecture as a concern. Both indicate early-marketactivity.

A bit fewer than 30% of respondents indicated connecting to legacy enterprise systems astheir greatest challenge, generally a later concern based on the business case for mobility withdependencies on solution architecture.

Security is a concern of approximately 25% of respondents, possibly supporting more early-market activity and greater concern over creating a business case and challenge of solutionarchitecture.


What elements within a mobile project does your companyfind most challenging?

% of respondents0 5 10 15 20 25 30 35 40

Other

Mobile UX

Mobile Security

Connecting to Legacy Enterprise Systems

Solution Architecture

Defining Tangible Benefits and Return on Investment 36.3%

32.2%

26.9%

24.0%

18.7%

7.0%



Mobile Applications

Mobile application implementation was the top response to the question of greatest need formobility strategy assistance (49.7%), closely followed by 45.5% of respondents who identi edroadmap design as their greater need.

Nineteen percent (19%) of respondents identi ed business process strategy as their greatest needfor assistance. Combining that response with the need for roadmap design assistance re ects theearly-stage of the mobility market.

Respondents were given the opportunity to choose more than one answer.


Of the following stages of Mobility Strategy,where do you feel your company could use the most assistance?

% o

f r e

s p o n

d e n

t s

0

10

20

30

40

50

OtherMobile Applications

Implementation

Biz ProcessMobilization

MobilityRoadmap

Design

45.5%

19.4%

49.7%

7.3%


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Future Business Outlook

Looking at overall software budgets, respondents were asked to share their 2011 plans.Compared to 2010 survey data, all categories of spending remained consistent in its breakdown.

There are no notable changes projected in 2011, as compared to 2010. This may suggest theexpectation of continued market stability and a predictable economy.

What is your approximate software developmentbudget for 2011?

Less than $500,000

Between $500,000 and $1,000,000

Between $1,000,000 and $5,000,000

Between $5,000,000 and $10,000,000

Between $10,000,000 and $50,000,000

Greater than $50,000,000

32.9%

18.8%

30.5%

8.5%

6.6%2.8%



Future Business Outlook

Looking further into projected budgets, we asked respondents to characterize their 2011 budgetas compared to 2010. The results parallel 2010 survey data and are highly favorable for an activesoftware development market, as well as expectation of an improving business environment.

Seventy-nine percent (79%) of respondents indicated their software development budgets wouldincrease in 2011; with nearly half indicating their budget is likely to grow greater than 10% ascompared to last year. Only 5.2% believed their 2011 budget would decrease by 10% or more ascompared to 2010.

This is an even more bullish outlook for budget growth than reported in 2010, with the greatestchange being respondents who expect their budget to increase by greater than 10% over 2010budgets. Respondents expecting 10%+ budget growth increased from 35.8% in 2010 to 46% in2011. Given the greatest represented persona in the survey is executive management with scalresponsibilities, this is signi cant.

Is your 2011 software development budget

Greater than it was for 2010 by less than 10%

Greater than it was for 2010 by greater than 10%

Less than it was for 2010 by less than 10%

Less than it was for 2010 by greater than 10%

38.9%

46.0%

10.0%

5.2%



Greatest Potential Impact to Your Business in 2011


We closed the 2011 survey with an essay question on what respondents believe to be thegreatest software development trend potentially impacting their business in 2011.

As with last years response, three categories of answers stood out the majority of respondents again believe trends in SaaS/Cloud and Mobility have the greatest potentialimpact on their business in 2011.

Here is a sample of the answers we received:

Agile Android tablet growthandroids

Availability of Open Source code, smaller development teams, and philosophy Availability of skilled resourcesBIBiggest impact is range of competing mobile platforms and providing middleware for all of them.Business application mobilityChallenges related to VC Funding and overall economic conditions.Changing of the mobile resources (tools) in the market place.CloudCloud and Mobile

Cloud and MobilePrivate clouds, mobile devicesCloud ComputingCloud SecurityCloud servicesCloud Standards DevelopmentCloud, Small Form Factor DevicesSoftware moving online to the cloudCloud/SaaS

SaaS / CloudSaaS and MobilitySaaS and the CloudSaaS tools and growthSaaS/Cloud computing, digital data storage and services competition and growthIncreased interest in SaaSCustomer interest in Cloud




Contemplating the migration to cloud computing.Continued migration to web-based applications

Acceptance of web based solutions as a viable delivery system.Creating best UX

Changing expectations for User Experiencecross-platform mobile deploymentCustomers Impact BusinessCustomers wanting Control in the cloudData integration and visualization.Data warehousingDevelopment for Slate/Tablet devicesEHR Certi cationElectronic Medical Record Technologies and Mobile technologiesEmergence and adoption of SaaS by our target customersEmerging shift to mobileend of Microsoft dominanceExpansion of Smart Phones in business. .NET Framework 4. IHE Initiative.Flashy UI and Web/Cloud based applicationsGrowth of technology such as iPadHTML 5/CSS 3 acceptanceImproving SecurityIncreasing acceptance of open source CMS for the enterprise.Integration of legacy in house without side developed apps and vice versaInversion of ControlLean SW development, CI and OSGiLinux on embedded devices, Python as a web-platformMicrosoft's communications on Windows 8 development strategy is completelyincompetent.iPad and MobileMobileMobile and all other electronic delivery channelsMobile and Cloud Computing

Mobile and Virtual Reality Development trend.More developer jobs than available developersMove to agile for large projects.Move to Agile/ScrumMove to cloudMoving away from app serverNearshore growth




Need to adapt UI designs for implementation on both smartphone and notepad form factorsNew government regulationsNew OS'sNOSQL database development - early stages but forcing paradigm rethink

Offshore supportOther software development & .NET standardsoverall economyPCI Security CompliancePlatform changeResearch and Development and New Invention in current marketSearch based appsSecurity breaches and exposureSOA Social Networking for sharing of developmentSupporting multiple mobile platforms: iPhone, iPad, Android, BB, & Windows Phone

Tablet PCs Tablet, Cloud Tablets The economy impact on development resource availability overseas The movement to the Cloud. The need for enterprise grade features provided in one consistent user experience.upgrades & advancementUse of virtualization.using internet technology to create process improvements in marketing operations

Vendors consolidation


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Software Development Trends Survey Results 2011

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