This IDC study reviews the top 10 predictions that IDC's Software Business Strategies (SBS) group analysts believe will have the most profound impact on software industry business models. The SBS team examines 2008 software vendor business model shifts relative to broader industry disruptions. Building on the foundational principles from IDC Predictions 2008: The Post-Disruption Marketplace Takes Shape (IDC #209776, December 2007), the SBS team believes that key industry shifts will occur around four key disruptions that are continuing to redefine opportunity and strategy in the IT market. Although these disruptions have been in process for the past several years, IDC's SBS team believes 2008 will mark the year in which software vendors fully engage their new business models. Software firms that continue to view these shifts as disruptions rather than the new rules for competing will be in deep trouble because more market share is certain to shift in the next five years — as a result of these new approaches — than we saw in the past 10 years.

In light of these predictions, IDC's Software Business Strategies analysts offer the following essential guidance:

• Anticipate business model shifts and their impact. With so many software firms engaging new business models in 2008, it will be important to pay attention to the changes and their potential repercussions.
• Articulate your road map. Any business model shift will need to have strong support from partners and customers because neither community wishes to see its valued partner/supplier suddenly take a strategic "hard left."
• Engage new management disciplines to ensure success. Without the management disciplines and an understanding of the required skills, making any business model change is inherently risky. For that reason, companies need to look beyond the surface to completely understand the business model and its underlying mechanics.

"Over the past few years, we've seen many interesting business model innovations," said Stephen Graham, group VP, Software Business Strategies. "We believe 2008 will mark the year that several large vendors and their respective partner ecosystems take these business model shifts mainstream."