Opinion: Enterprise software train builds steam

Reports of sagging revenues with stalled sales have driven much change in the enterprise application software market this year. Revamped plans, sell-offs of things non-strategic, acquisitions, and global sales management reshuffles account for just some of the activity of recent months. Mix this in with a raft of product announcements and things are a little confusing.

It's impossible to sum up all the developments in this limited space but just a few recent newswire snippets include: Microsoft to buy Danish business software developer Navision for $US1.3 billion and then push on into the mid-tier ERP market; Computer Associates boosts its bottom line by selling non-strategic interBiz unit assets to SSA Global Technologies with the latter company claiming the buy will bolster growth in automotive, consumer goods, general manufacturing and pharmaceutical industries for supply-chain management, financial management and human resource management product lines; SAP announces planned enhancements to the key mySAP.com suite applications including CRM and supply chain management (SCM) software following a tough first quarter and global sales management changes; PeopleSoft, also facing tough times on the revenue front announces new supply chain management and CRM applications aimed at particular verticals along with a "connected enterprise" message. On it goes. Tough times are pushing enterprise software vendors to find new, more focused ways to entice customers. Meanwhile, the urge to revise product plans seems hitched to a locomotive that cannot stop.

So, with many enterprise software vendors dealing with sales slowdowns, and many of the big consulting players suffering, reports of IDC projections of a 13.5 per cent compound annual growth rate worldwide in enterprise software related services seems odd. IDC's "solution services market" deals with SCM, ERP, CRM, knowledge management, e-commerce and globalisation and localisation services for adapting enterprise software to the laws, culture and regulations of specific countries.

Is it likely that investment in services to implement and fine-tune enterprise software will grow at a faster rate than sales of the software itself? Is the search on for better value?

David_Beynon@idg.com.au.

Editor in chief

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