The importance of what each vendor's ecosystem can deliver shouldn't be overlooked by CIOs. "Remember, without a killer app, " Woods says, "a platform doesn't live very long."

Fierce Competition Continues

While the competition in this space has always been intense, CIOs can expect more hand-to-hand combat among enterprise application providers. "I don't see, at this point, any relaxing of the competitive intensity of this industry," says Woods. And that's one piece of good news for CIOs.

Even as the enterprise vendors accumulate more areas of expertise and technology platforms (through organic development or acquisition) and become economies unto themselves, there still is plenty of vendors to play against each other during negotiations, say analysts. That's because "there is so much margin on the line," Woods says.

The advice for CIOs: Don't be afraid to play the vendors against one another. "The vendors are getting smarter about when to compete and when to coordinate—what's worth fighting over and what's not," Woods says. And if your business is worth fighting over, you should be able to get a sweet deal in 2008.

In addition, with all of the freshly minted mergers and acquisitions, adds Ray Wang, a principal analyst at Forrester, now is as good as time as ever to negotiate longer maintenance contracts and buy new modules at significant discounts. "In the history of post-merger announcements," he says, "sales reps typically will be offering sweetheart deals to close out the quarter and status as an independent company."

We Know About the Goliaths. Don't Forget About the Davids

The goliath enterprise vendors aren't known for their innovation. But smaller vendors are. "The fact is [smaller vendors] can provide dynamic applications pretty quickly," Leaver says.

In the future, those small vendors will be building applications with greater flexibility and "plug and play" adaptability than what comes out of the bigger companies' R&D departments. For example, Leaver notes that most small vendor apps are being built so that they can run on top of IBM Websphere, SAP NetWeaver and Oracle middleware products so that IT departments can "configure it and change it on the fly." And with these applications, IT people have to worry less about architecture decisions, and just base their purchases on the relative usefulness of the application itself.

In addition, Albert Pang, IDC's director enterprise applications research, notes that all this innovation will lead to more Web 2.0 and consumer-flavored applications for enterprise users. "It will not be long before business users are able to take advantage of tools from vendors such as Serena Software that essentially allow them to create mashup content on the fly," he says.