Business Strategy for Software Executives
August 7 , 2006
Software’s Sky is Not Falling
Last week’s SandHill.com oped doomed the enterprise software industry to a future dominated by open source. A collective rebuttal to the argument asserts that any obituary of enterprise software is premature indeed.
By the “Enterprise Irregulars”
I think SandHill.com must like provocative titles that attract readers and inflame controversy. It’s been steamy enough on the East coast this August but the recent op-ed piece, “Is Enterprise Software Doomed?” by Guy Smith of Silicon Strategies Marketing, hit many hot buttons of insecurity for readers – most brought on by the advance of open source software.
I belong to a group of bloggers called the Enterprise Irregulars. We analyze the software industry from a variety of perspectives, that of software company executives, services providers, consultants and investors. Our common denominator is many, many years of watching companies, technologies and customers come and go from fashion in our rapidly changing industry.
The drama in Guy’s piece made him sound like software’s “Chicken Little.” In it, he asserts that open source will change the software business to such an extent that the entire industry will end up extinct.
Guy is correct about many aspects of his argument: that business models are changing, that it is much more challenging to make a buck, that open source is having a big impact (particularly in middleware) and margins are plummeting. These are ideas that I and other Irregulars have espoused over the last year.
But Guy is overlooking many key facts about the reality of how enterprises buy software, how the current ecosystem of thousands of vendors sell software and how they make money doing it. My fellow Irregulars felt compelled to rebut Guy’s argument in the article to follow.
No Guy, the enterprise software sky is not falling. It is being reborn – as you summarize at the end of your piece.
Meet the “Partner Killers”
The megavendors making vertical acquisitions are destroying the fabric of partnerships in the enterprise software ecosystem. Read Erik Keller’s two-cents on IBM’s partner-killing deals of the week in this post to his SandHill.com blog, The Software Critic.
New Roles for New Sales Models
As the marketing strategy for many software vendors moves from “push” to “pull,” the role of sales and marketing shifts dramatically. Antony Awaida and Jeff Tonkel flesh out the role of enterprise sales 2.0 in this week’s post to the SandHill.com Blog on sales and marketing best practices.
Publish Your Perspective!
The SandHill.com Blog wants your opinions. Send your thoughts on the enterprise software industry to email@example.com and we’ll publish them in our blog.
The Most Important Driver of Business Change?
Innovation. That’s according to a new McKinsey survey of global executives. The findings show that future profitability will depend most on the knowledge trends and the forces of globalization. Read more about the top business trends in this story from The McKinsey Quarterly.
Poll: Is Enterprise Software Really Doomed?
Last week’s SandHill.com oped by Guy Smith stirred up quite a bit of controversy. Let’s have a show of hands about how open source will impact the future of enterprise software?
Last week, SandHill.com readers gave their opinions on whether VCs were starting to fund a new technology bubble.
More at SandHill.com:
SAP hones the Oracle Dagger.
Oakley Networks receives $12 million.
Opsware buys Creekpath Systems.
Terracotta names Amit Pandey as CEO.
Send us your feedback on this newsletter and the SandHill.com site.
“I'm extraordinarily patient provided I get my own way in the end.”
Courtesy of Malcolm Kusher, The Kushner Group
THIS WEEK'S SPONSOR
Identify is the leader in application problem resolution software, helping hundreds of enterprises and software vendors reduce application support costs, speed application delivery, and increase application quality, performance, and availability.
Software Pulse is a publication of SandHill.com, the online resource for software business strategy.
To unsubscribe, see the bottom of this email.
Send us your feedback,
SandHill.com is published by Sand Hill Group, which provides investment and management advice to emerging leaders in the $600 billion enterprise software, services and solutions market. Sand Hill Group produces the Software and the Enterprise series of conferences for industry executives, and authors research reports on cutting-edge technology topics.