I saw MR in his element on Tuesday, when I dropped into Software 2005, the second annual enterprise software conference organised by MR and his team at the Sand Hill Group. And judging by the Silicon Valley hack pack and top exec and VC turnout at the VIP lunch, MR's hustling and bustling has been rewarded.

I spent an interesting afternoon at Software 2005, which surprised me because I have found the enterprise software space much less interesting now that consolidation has reduced the sector to a few giants and many smaller software-as-a-feature companies :-)

I sat with MR at lunch, (he is a big SiliconValleyWatcher fan BTW). Here are some notes from my chat with the "swami of the software sector".

M.R. Rangaswami:

[On consolidation trend and valuation of startups.] Yes, the big players do control valuations; and I think that is going to lead to VC funds delivering much lower returns to their limited partners. It'll probably drop to about 12.5 percent return, rather than the 25 percent that we’ve gotten used to.

[On trends at the show…] The software-as-a-service sessions have been jam packed; that wasn't the case last year. This makes me wonder if we’ve seen the last of the $1bn software company, whether any software company will ever again reach that level of revenues.

[On stacks and platforms…] SAP's Netweaver is certainly going to be an important stack and platform because of the user base. If you look at everybody's stacks, it's interesting to see that Microsoft and IBM don’t have any applications at the top of their stacks; and I think that is going to be a challenge for IBM. They should probably have gone after PeopleSoft.

[On startups…] Greg Gianforte's session on how to bootstrap your company was packed. Next door, the venture funding session was packed too! That is so very typical of Silicon Valley. About 50 percent of the people here at the conference are from startups.

Sand Hill's web site has become a very good software enterprise magazine, take a look here: http://www.sandhill.com/index.php