More price cuts are expected this year because of fierce competition between cloud and on-site software providers, and enterprises will be the beneficiaries.
In particular, in the customer relationship management market, a key cloud battleground, seat prices for segments such as sales force automation are expected to decline in the next twelve months and by 25 percent through 2018, according to market research company Gartner.
This will be caused by incumbent vendors heavily discounting their cloud offerings to try and prevent their existing on-site customers from defecting to companies such as Salesforce.com and SugarCRM.
Enterprises will also benefit from increased price competition in other areas, such as database management system application infrastructure and middleware. However, the price competition in these sectors isn’t quite as ferocious.