The enterprise software market is dead, dead, dead....
A few weeks ago I was engaged in a debate with John Gallant, Editorial Director of Network World, via our respective blogs, about my assertion that enterprise software markets have become dead boring.
I'd like to change my argument. Enterprise software markets are not dead boring. They are just dead.
Larry Ellison has killed the enterprise applications software industry. It's dead, dead, dead, dead, dead, dead. The Siebel acquisition was the final blow, the stake in the heart.
The losers include the print media, as yet another large tech advertiser disappears.
The other loser is innovation in the enterprise software industry itself. With such a small number of big companies at the top (Oracle, SAP, Microsoft, IBM) there won't be much of a bidding war for promising startups. Valuations will be "reasonable" -- and "reasonable" never fires up the blood of a venture capitalist.
VCs need promising "ten-baggers" -- the one-in-ten winners that cover the bets on the nine losers. But with IPO markets gone, and the top companies controlling valuations, there is no decent exit strategy for investors.
That means innovation won't be funded. And the big software makers won't be innovating much, as per usual.
Larry gets all the maintenance revenues, and corporate customers have to lump it.
Here comes the cavalry?
Or, can the software-as-a-service generation of software companies-- such as Salesforce.com and RightNow Technologies--lead a cavalry charge to provide enterprises with choice and Oracle with significant competition?
That remains to be seen. One question is whether those applications can be be scaled up to carry large enterprises. We'll be watching with some interest. After all, that's one of the few areas of the enterprise software industry that is still worth watching.