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Six Enterprise Application Trends to Watch in 2008

Enormous vendor consolidation has changed the enterprise application landscape forever. But there's more change and uncertainty on the horizon for CIOs. Here's what you can expect and what you should do.

By Thomas Wailgum

December 14, 2007 — CIO — If 2007 was any indication of what's to come, the one thing companies using expensive enterprise applications—ERP, CRM and supply chain management systems—can expect is more change in vendor alliances, pricing schemes and software innovation in 2008.

On top of that, gloomy economic forecasts for 2008 could have significant financial consequences for CIOs and their IT budgets.

So with an uncertain financial outlook, it appears that CIOs will (again) be asked to do even more with even less next year. And nowhere is that more critical than with a company's core enterprise applications and software platforms.

"Globalization, rapid market change, a changing workforce and regulations have turned the desire for more agile and usable applications into a business imperative," says Sharyn Leaver, research director of business process and applications at Forrester Research. "The result: process and applications professionals are on the hook to deliver more agile and usable applications."

In addition, Jeff Woods, a research vice president at Gartner, says that mounting pressure from the business side to get "real business benefits" from enterprise systems while also taking advantage of advances in technologies such as SOA to stabilize computing environments leaves CIOs to "make strategic decisions that are more important than the ones they had to make pre-Y2K."

Here are six areas that will have a big impact on CIOs' 2008 enterprise plans.

More Application Vendor Consolidation Ahead in 2008

IBM buys Cognos. Oracle gobbles up Hyperion. SAP swallowsBusiness Objects. HP acquires Opsware. And Microsoft buys a number of software makers.

This past year will be forever known as the year of enterprise software consolidation and acquisitions. Billions were spent by the big boys (SAP, Oracle, IBM, Microsoft) on smaller competitors that offered tantalizing application sets.

So what should CIOs expect in 2008? According to a survey from technology consultancy The 451 Group, people in the software industry expect more mergers. More than 85 percent of corporate development professionals at companies that have acquired other companies within the year said that they "expect to maintain or increase current-year levels of merger and acquisition (M&A) activity in the coming 12 months," with half of the companies expecting to increase M&A spending. The survey polled corporate development and strategy professionals from companies that collectively have spent more than $150 billion to acquire nearly 500 target companies during the past five years. Less than 10 percent of the respondents said they expect their acquisition volume to decline.

 

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