Just forget about 2009. That’s exactly what the major enterprise software players have to be thinking right now. The hatches have been battened down, the wagons have been circled and the write-downs have been written. Survive 2009 and pray that the economy and corporate IT spending rebounds in 2010.
In fact, ERP, CRM, supply chain and BI vendors such as SAP, Oracle and Microsoft have had their collective eyes on 2010 for a long time—laying out their visions and roadmaps to their customers, stocking the product lines with next-generation software offerings, and promising a better future for their customer bases.
So even before the global financial market meltdowns and recession occurred this past fall, 2009 was going to be a buffer year for the major enterprise software vendors. A calendar year to get through on the way to delivering all their wondrous new products in 2010. That’s it. Nothing more. Nothing less.
But now the year of Arthur C. Clarke’s space expedition is going to be even more critical for enterprise software players. Just look at what the major vendors have riding on that year:
Oracle has said that it will finally deliver its next-generation Fusion Applications suite.
Back in January 2006, you’ll recall, Oracle President Charles Phillips proclaimed that Oracle was halfway to delivering a standards-based killer enterprise application suite: a combination of the best features and functionality taken from Oracle’s expansive E-Business Suite, J.D. Edwards, PeopleSoft and Siebel product lines. (See “Oracle Fusion Applications: Is 2010 Delivery Too Little, Too Late, or Smart Strategy?” for an inside look at the launch delays, large expectations and executive departures that have dogged Oracle’s next-gen application suite.)
Will Oracle finally deliver Fusion Apps in 2010? Analysts say yes. Will Oracle slay its competition with Fusion Apps? Analysts aren’t so sure.
Oracle archrival SAP has been stating for years that, by 2010, the German software giant wanted to have 100,000 customer organizations running its software. In addition, SAP cofounder and legendary leader Hasso Plattner let it be known in 2000 that he’d like to see SAP with 100 million users toiling away on SAP products. (He also said back then that SAP wanted “to be the AOL inside the company.” Ouch.)
As of late 2008, SAP had 76,000 customers (that number was buoyed by the Business Objects acquisition). In 2008, many of those same customers were angered that SAP had increased its maintenance fees for 2009. SAP had also scrapped its financial outlook and forecast to the financial analysts who follow the company.
So to make its 100,000 goal, SAP has roughly 24,000 new customers to sign on between now and 2010. And a very dismal economic climate in which to do it. (To read about its self-inflicted wounds and the monumental challenges facing SAP and its new applications guru, see “Can Oracle’s Former Fusion Apps Guru Really Stop SAP’s Slump?”)
And then there’s enterprise software upstart Microsoft. By 2010, Microsoft is hoping that its nascent Dynamics line of ERP and CRM software will have cut into SAP’s and Oracle’s claim on those business software markets.
In addition, Microsoft announced that in 2010 its customers will be able to purchase its anticipated business intelligence offering—which Microsoft claims will be “business-friendly” due to the software’s ease of use. “If you know how to use Word and Excel, then you’ll be able to use our BI—that’s our commitment to customers,” noted a Microsoft exec at its October BI conference.
AMR Research’s John Hagerty had this to say about Microsoft’s BI efforts, in a recent report: “What’s new with Microsoft’s BI? Not much for 2009, but 2010 is shaping up to be a banner year.”
Back in the Dec. 15, 2003, issue of CIO, this is what we thought the enterprise software market would look like in 2010: “Big company CIOs in 2010 will find themselves increasingly beholden to an outdated economic model for purchasing, installing and maintaining software. Fewer, bigger vendors will mean higher prices, fewer choices, higher switching costs and increasing vendor lock-in.”
Unfortunately, the 2010 scenario we envisioned in 2003 has happened. Even worse, none of the major vendors’ strategies for 2010 appear to solve any of the dire business consequences that we laid out five years ago.