Business Strategy for Software Executives
July 17, 2006
Avoiding Software's Perfect Storm
In order to avoid being hit by megavendors or disruptive startups, established software vendors must act now to strengthen their positioning and reinvent their value chain.
By Phillippe B. Vincent, Accenture
The current competitive environment in the enterprise software industry can be particularly tough on best-of-breed vendors, especially mid-sized companies with traditional business models.
These companies must assess a potential double threat: at the top, vigorous challenges by the mega-vendors bent on further consolidating the market; and at the bottom, disruptive challenges by software-as-a-service (SaaS) providers or open source vendors introducing innovative new business models. For traditional best-of-breed vendors, the most destructive scenario, or the "perfect storm," is one in which both challenges materialize simultaneously.
As the enterprise software sector grapples with an era of slower growth, the "perfect storm" appears to be brewing for an increasing number of vendors — especially those in the business application arena. What should these companies do to prepare for the tempest?
Accenture believes several options are available to them, including a reinvention of the value chain, diversification into complementary markets, and a move into services provision. Which avenue is best largely depends on each company's specific competitive, economic and market position.
When Did Forrester Become Boring?
During the dot-com bubble, Forrester tended to be the analyst group which released reports that amounted to the equivalent of yelling “Fire!” in a crowded theatre. After reading the firm’s latest research, Erik Keller of Wapiti longs for the good old days of sensationalist proclamations in this week’s post to his SandHill.com Blog, The Software Critic.
Is Open Source Really Cheaper?
Despite all the talk of community and source code, the real reason enterprises are interested in adopting open source software is its reputation for being less expensive. But is it? Tony Baer of OnStrategies takes a look at the model and uncovers the real driver of adoption is the need to achieve a competitive edge. Read Tony’s analysis in this week’s post to the SandHill.com Blog on the future of open source.
Silicon Valley: Powered by Silicon India
If the epicenter of technology development sends its work offshore, can it rightly hold onto its title? The next decade will likely deliver the answer to that question for the Silicon Valley. A new report by offshoring research and consulting firm, Zinnov, says the majority of Silicon Valley hardware and software companies surveyed are offshoring work in India. Access the report and find out more about offshoring practices of the 50 leading Silicon Valley companies in this post to the SandHill.com Blog on offshoring.
Publish Your Perspective!
The SandHill.com Blog wants your opinions. Send your thoughts on the enterprise software industry to firstname.lastname@example.org and we’ll publish them in our blog.
Answers on China: From Entry to Execution
Multinational companies are shifting gears in China, turning away from entry strategies and focusing instead on execution. A new article from The McKinsey Quarterly interviews the head of McKinsey's offices in China answers the questions that senior managers of multinational companies are asking.
Poll: SAP’s Rocky Quarter
Last week, SandHill.com readers gave their opinions on if and when commoditization will take hold in the enterprise software market.
More at SandHill.com:
Microsoft's CRM catch-up plan, IBM accused of hacking, Oracle hiring again...
9 software companies receive $10M+, including CacheLogic and Surgient.
Acquirers include CA, EFJ, Opsware, Kronos and more...
New execs at Knowledge Networks, Visible Path, Cast Iron Systems and more...
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