Software Pulse

Business Strategy for Software Executives

August 1, 2006

Guy Smith

Is Enterprise Software Doomed?

The old ways of the software business are dying but there is still time for even old-fashioned vendors to reposition themselves and compete in the open-source era.

By Guy Smith, Silicon Strategies Marketing

Like the old man slung over John Cleese's shoulder in Monty Python's Holy Grail, the enterprise software industry today is yelling, "I'm not dead yet!"

The reply is, "Well, you'll be stone dead in a moment."

The rumors of the death of enterprise software are premature, but a near-fatal diagnosis is not. Fundamental shifts in the competitive landscape are, at the very least, changing R&D practices, pricing, marketing, promotions, and buyer attitudes. The software industry that we all grew up with is indeed dead.

By swallowing a dose of reality and re-tooling their positioning, product and sales strategies now, most enterprise software vendors will live long enough to compete in the open-source era.


News Update: Toward the Horizon

Guess which sector draws more venture capital than any other? The focus shifts to the future this week with competitors partnering on SOA, competitors fighting over SaaS, IBM changing its pricing model - again, and Microsoft dinging Firefox users. Read these stories and more software news of the week in the weekly news summary.

In Search of a New Tech Bubble

Matt Miller

More and more media outlets are starting to talk about a new bubble in technology investing. Matt Miller of WaldenVC disagrees. In the latest post to his Blog, The Picky VC, he searches the latest valuation and investment trends and finds little evidence of a new bubble.

Mercury Lives Happily Ever After

Mercury Interactive has had a rough year ñ but its acquisition by HP may be a fairy tale ending to a long and sordid story of life as an enterprise software vendor. Tony Baer of onStrategies thinks the match is a good one. Read why in this week's post to the Blog on merger mania.

With Partners Like TheseÖ

Microsoft's vertical market strategy took a new turn this week with the acquisition of health IT software, Azyxxi. The move is troublesome, according to Erik Keller of Wapiti LLC. As major enterprise vendors move into niche markets, the delicate ecosystem is disrupted. Erik says vendors must examine their partnerships carefully ñ or face the consequences.

Publish Your Perspective!

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

Hear Podcasts from Software Industry Luminaries

This week, the keynote address by legendary business thinker, Dr. C.K. Prahalad, joins the list of Software 2006 speaker podcasts. Visit the Software 2006 podcast page and hear from the likes of Ray Lane, David DeWalt of EMC and Thomas Kurian of Oracle.

Donít Miss Dr. CK Prahalad on Innovation

The worldís no. 3 management guru talks to and describes what software vendors need to do to evolve their offerings for the next era of business. Read CKís oped ìInnovation Through Co-Creationî on

Poll: Tech Bubble Rising?

Second quarter venture capital investment remained strong. Are VCs pushing the tech industry to another unsustainable position?
Take our Pulse Poll >>

Last week, readers gave their opinions on the impact of Microsoft's entry into the on-demand market.
Share your opinion and see the results >>

More at

Google launches open source repository.
Read the most important enterprise software industry news of the week >>

Pi receives $9 million.
Monitor the latest software venture capital deals >>

Agilent buys Xpedion Design Systems.
Size up last week's software M&A deals >>

Bob Potter named chairman and CEO of WebGen Systems.
See who's made it to the top in our list of recent software executive appointments >>

Send us your feedback on this newsletter and the site.

Parting Thought

ìInventing is a combination of brains and materials. The more brains you use, the less material you need.î
ó Charles Kettering

Courtesy of Malcolm Kusher, The Kushner Group