Software Pulse

Business Strategy for Software Executives

August 7 , 2006

Software’s Sky is Not Falling

Last week’s 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 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.


News Update: By the Numbers

Another billion-dollar pledge for India, a new no. 3 in the enterprise market, an open source vendor gets $20 million and a new intern joins Bill Gatesí office. Read these stories and more software news of the week in the weekly news summary.

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 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 Blog on sales and marketing best practices.

Publish Your Perspective!

The Blog wants your opinions. Send your thoughts on the enterprise software industry to and we’ll publish them in our blog.

Last Chance for Summer Reading!

Put down that romance novel and pick up the lastest titles on business trends. New books on topics including “The Long Tail,” blogging, outsourcing, competitive intelligence and team building. Visit the Insight page and scan our list of recommended reading.

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 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?    
Take our Pulse Poll >>

Last week, readers gave their opinions on whether VCs were starting to fund a new technology bubble.
Share your opinion and see the results >>

More at

SAP hones the Oracle Dagger.
Read the most important enterprise software industry news of the week >>

Oakley Networks receives $12 million.
Monitor the latest software venture capital deals >>

Opsware buys Creekpath Systems.
Size up last week's software M&A deals >>

Terracotta names Amit Pandey as CEO.
See who's made it to the top in our list of recent software executive appointments >>

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Parting Thought

“I'm extraordinarily patient provided I get my own way in the end.”
– Margaret Thatcher

Courtesy of Malcolm Kusher, The Kushner Group