Software is dead and companies who operate on pure software model will be be outdated if they do not change fundamentally and to be honest I do not see how would they. Change will come from the outside replacing outdated business models: the software license model.
Have you ever tried to get support from IBM or Oracle? It is has gotten very bad. No one knows how their products work anymore because they are been put together by acquisitions rather than by organic development. Companies like IBM and Oracle have pursued growth via acquisitions as it is cheaper than to grow organically. The cost of talent is high and more importantly talented professionals are not attracted to large bureaucratic entities.
If you look at Oracle and IBM financials you can see that the bulk of their revenues has shifted towards services and maintenance. Outfits like IBM and Oracle will be able to survive as services organizations but I doubt that they will be able to transform themselves to an application providers. The software culture is too much ingrained in their DNA to succeed.
Our company shifted towards open source components for all development as they offer faster and cheaper platforms. Open source and Saas (software-as-a-service) offer more efficient model for users. Most small and medium enterprises have adopted the model. Although large fortune 1000 companies are yet to get with it, they will. The cost and efficiencies of the Saas and open source will outweigh the control and security that large companies see in traditional software licenses.
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