Software developers need to generate recurring revenue from their user bases if they are to afford the same levels of research and development as in the past, says Softline COO Steven Cohen.
Speaking at the first Pastel World Conference in Sandton this morning, Cohen said the 1980s were simpler times when no one needed to establish recurring revenue because they were selling so many new packages.
However, with post-Y2K growth rates having slowed, software vendors are now focusing on evolving their business models, seeking to transform their customer bases into annuity income generators.
He told delegates that the group was working on a programme for its Pastel accounting software, along the lines of a rental scheme.
"This will give us a revenue stream and knowledge of future income, which will allow us to spend more money on developing future technology," he added.
Pastel MD Terry Kier said 50% of Pastel`s revenue is derived from the revenue base, with revenue coming from upgrades and other sources. However, in the rest of the world the trend is to between 60% and 70%.
"So there is room to improve the revenue stream," he added.
Speaking at the same conference, SG Securities MD David Shapiro said two major trends were influencing the JSE: the falling rand and its impact on resources, and the concentration of trade in a handful of shares.
The top 20 companies on the JSE accounted for 75% of value traded, whereas the next 30 companies accounted for only 14%. Nearly 500 companies made up only 11% of value traded on the JSE.
The depreciation of the rand has helped resources stocks, which now account for half of market capitalisation.
Companies moving their primary listings offshore have found, among other things, that their liquidity has improved, their investor base has broadened and the cost of finance has declined.
With other companies wanting to follow suit, analysts are likely to follow them to London. South African companies with their main listings in London find that trade in their shares in London is double the trade in SA.
Investors moving their focus from regions to industries is likely to lead to a global stock exchange trading 24 hours a day.
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