SandHill’s questions on predictions as to how the software vendor landscape will change in 2013 found agreement among industry observers about the changes facing legacy software powerhouses. The questions also sparked tirades about Microsoft. Dive into their perspectives on the difficult challenges and necessary “rebooting” ahead.
Q: Which three to five software vendors will face the most dramatic change to their business in 2013?
Peter Auditore, principal researcher at Asterias Research: SAP, Oracle and Microsoft will face the greatest challenge to their business models as the disruptive SaaS and cloud vendors begin eating their installed base with new and innovative licensing models that completely change the enterprise software space.
SAP in particular is in an extremely weak position as it has been unable to bring one single SaaS or cloud product to market. Business By Design, Streamworks, Sales On Demand and Sourcing on Demand along with the massive push on sustainability have missed the mark and completely failed.
IBM and Oracle will gain tremendous competitive advantage with hardware software offerings at price performance levels other vendors can’t meet.
Paul Ressler, principal, The Cirrostratus Group:
- Cisco, who we often don’t think of as a software vendor, will make significant product changes to address the software-controlled network business.
- VMware will make some sort of major acquisition that will put them into the network infrastructure business, giving them the opportunity to dominate the software-controlled network space.
- HP will try to develop a more focused enterprise software strategy. This will result in continued upheaval in their business including niche acquisitions and significant layoffs. Unfortunately it will not be clear by the end of 2013 whether this strategy will be successful.
- BYOD (bring your own device) and increased use of mobile enterprise applications will put tremendous pressure on managing mobile security. Symantec will be well positioned to provide mobile security solutions and will provide many new offerings in this space and go through lots of growth. Other major software providers will make acquisitions in the security space to compete.
- Microsoft: Making Windows 8 a successful mobile/cloud platform will be critical.
- Oracle: Melding its legacy and SaaS offerings along with its hardware capabilities into a coherent cloud solution portfolio will be an enormous challenge.
- SAP: Sustaining its SaaS/cloud momentum sparked by the SuccessFactors acquisition will be essential to its migration from a legacy software company.
- Salesforce.com: Creating new business opportunities in the marketing cloud.
- Microsoft & IBM: The social business category war has woken the sleeping giants and both Microsoft and IBM will make big moves to take ground in enterprise collaboration and communication.
- Apple iTunes will be a make or break moment for this mega market cap company to remain relevant in the new wave of social media. They are surprisingly far behind the curve and could fall further behind if they cannot make iTunes relevant.
- SAP will swing for the fences with aggressive moves to take the category crown for cloud business. They want to keep their franchise relevant and shift their brand to dominate the cloud enterprise.
- While Oracle continues to work on their “con-FUSION” project to unify Peoplesoft with . . . um . . . Safra’s Cloud, the Workday crew has turned enterprise HR and ERP category on its head with a brilliant new experience to manage people, process and performance. They are the emerging category kings of cloud ERP and riding an $8 billion market cap. Watch for a showdown this year with NetSuite.
- Microsoft will bet the farm on mobile and tablets and make a move to own their phone through acquisitions or development to control both the device and the OS.
Andrew Hay, chief evangelist, CloudPassage: The easiest way to answer this is to list the top five software companies as defined by Forbes’ Global 2000 list: Microsoft, Oracle, SAP, Symantec, CA and VMware. These organizations will have to shift their software design and delivery models in the coming years so as not to be left behind by competitors.
However, a huge force of change in the software industry is the movement from up-front investment in large software deployments to metered usage of either cloud-based or even on-premises services. The biggest disruption will come to companies whose core products can be replaced by a metered cloud-based service. SAP by Workday, Oracle by Salesforce, VMware by Amazon, and so on.
Guy Smith, chief consultant, Silicon Strategies Marketing:
- Microsoft may well become one of the walking wounded. They failed to see how mobile was going to dominate consumer tech and dig deeply into corporate tech. Their two primary pillars — the operating system and office applications — are now threatened and Microsoft is way behind. I predict that Window 8, with a late, violent shift from traditional desktop interfaces, will be more of a flame-out than a barn-burning success.
- Adobe is facing more competition from open source, disenfranchisement of core technologies like Flash, and competent free apps for image/video/audio editing from vendors. In the absence of a game-changing new concept, they will devolve into servicing top-shelf producers and lose the bottom two-thirds of the market.
- HP, which saddens me since I cut my tech teeth on RTE and MPE. Serial psychotic CEOs have rendered HP a wandering invalid, with no key direction aside from gouging for ink cartridges. Like Microsoft, their PC business may be dinged and fumbling Palms didn’t help their mobile changes. Let’s hope they make headway in enterprise tech.
Kevin Cox, vice president corporate marketing, Actian Corporation: Microsoft will feel intense pressure from investors to break up the company because cloud computing makes their business integration strategy irrelevant. They are victims of their own success and missed a fundamental change in the client-side of the client-server architecture. Their enterprise application business has held back their OS business, which has held back their ability to truly embrace the cloud. If you truly love a thing, you have to set it free and know it will come back. Microsoft has never set its users free and has instead sought to surround and overwhelm them. Now the cloud has set them free.
Q: Which software vendors will we see most often in the news at the end of 2013?
Andrew Hay, chief evangelist, CloudPassage:
- Google for their Compute Engine
- Microsoft for the Surface and IaaS Azure
- Zynga for their corporate structure uncertainty
- VMware for protecting core business from cloud players while simultaneously attacking Microsoft’s core application business.
- Salesforce for becoming one of the top enterprise software companies with the best understanding of the advantages of cloud delivery
- Amazon for being the Infrastructure-as-a-Service (IaaS) leader
Chris Lochhead, Al Ramadan and Dave Peterson; co-founders and partners at Play Bigger Advisors: Apple will dominate the headlines. Every move post-Jobs will be watched and scrutinized. Every blind spot will be pounced on by competitors. Will iTunes bring them back to relevancy in social media? Will they continue to innovate the iPhone or just hit customers with feature creep? Will the iPad war be won with form, function or price? Is this the beginning of the end for Apple’s dominance? It’s a story worth watching.
Paul Ressler, principal, The Cirrostratus Group: Now that Oracle has embraced the cloud, they will continue to make acquisitions and make product announcements related to the cloud. Open source software vendors and projects will continue to have a lot of impact and visibility for infrastructure, platforms and applications. Microsoft will put a lot of marketing muscle behind Windows 8 so there will be a lot of news generated about Windows 8.
Kevin Cox, vice president corporate marketing, Actian Corporation: Facebook, Google and Microsoft. Good, good and bad.
Guy Smith, chief consultant, Silicon Strategies Marketing: Microsoft for falling, Google for cloud and mobile rising. These two are cause and effect.
Lincoln Murphy, founder and managing director, Sixteen Ventures: I think we’ll see Microsoft, Oracle, SAP and other major legacy enterprise software vendors in the news in 2013 for both missing major cloud opportunities and, again, trying to buy their way into the cloud/SaaS business.
But I’m most interested in the companies that don’t make the news — the ISVs moving to the cloud, the pure-play SaaS vendors that are already there that are changing things in their markets and making huge gains in profitable growth but that are outside of Silicon Valley and outside the limelight. Those companies always have been, and always will be, the backbone of the tech industry, and 2013 will be no exception.
Kathleen Goolsby is managing editor at SandHill.com.