UK vendors face crunch

The UK software industry is in poor shape, according to the outgoing chief executive of financial software suppliers' association Basda, write Janice McGinn and Dennis Howlett.

After 14 years of commenting on the software market, Dennis Keeling is moving on, and he gave Computing an exclusive preview of a hard-hitting speech that is sure to give vendors and users pause for thought.

'The last couple of years have seen sales and staff numbers decline. This is the start of massive industry and business changes, and today's market conditions are comparable with the instability of 1970-71, when decimalisation was introduced,' Keeling plans to tell the Institute of Directors next month.

'There will be a massive downturn among the traditional vendors over the next two and a half years.'

He adds: 'History shows us that many of the big names will almost inevitably founder, and even SAP says privately that there is nothing new going on.'

Keeling is scathing about the shortcomings of many high-profile UK products.

'Usability is pathetic. They stuff the screens full of irrelevant rubbish and sacrifice everything for complexity. They fail to recognise that users want a single view.'

The outgoing Basda chief sees most vendors in future going into 'maintenance' mode. 'Services will be more important than licence revenues and a company like SAP can certainly sustain growth through services like training,' he says.

By 2000, applications will be available at bargain prices, says Keeling, adding: 'Customers aren't daft. They see what's happening and they'll hold off for the next round.'

Keeling predicts there will be innovative retail channels after 2001, but few guarantees of success in what will be a war of attrition.

While declining to name winners and losers, he said UK vendors like JBA have old technology, the new guns such as Navision and Damgaard Open Accounts are 'the potential stars'.