Thursday, June 18, 2009

Trends in Enterprise Software

What trends will emerge around the enterprise software space as we head into what looks to be shaping up as a daunting 2009?

Here's a look at three trends I thinks have been playing out, and will continue to do so even more noticeably in 2010 against the backdrop of the troubled economy.
  1. Increased software consolidation among big vendors opens opportunities for smaller providers.

    Consolidation has been the trend in the BI space, with Business Objects, Cognos, Hyperion and Sun Microsystems being acquired respectively by SAP, IBM, and Oracle.

    When mergers occur in any part of the software sector, customers may take a breath to see what is going to happen to the
    products they use as they are brought into the acquirers fold. In the BI (Business Intelligence) world, the mergers of the last 18 months have created just that kind of "pause" effect, and it's opening up a real window of opportunity for open source companies and other more nimble start-ups that represent more modern alternatives.

    Large software companies have business models that require them to keep pushing the largest enterprise software deals, the largest sales, which means building bigger suites of software, so there's greater complexity and bigger price points which fuels additional opportunities for open source companies where the model is simple, integrated architectures. The cost, long deployment windows and complexity of existing BI technology means that it hasn't worked its way deep into the enterprise. Only 15 percent of users in the enterprise typically engage with BI software.

    Now when you have to get BI to those 85 percent of individuals not touched by it, you can get to them with lighter-weight,
    less complex solutions that solve the needs of the average worker in general.

  2. Enterprises will be more interested in SOA and Web services-driven architectures that define newer software offerings.

    Large vendors of proprietary architectures will have a hard time adjusting and taking advantage of Web based 2.0 architectures and such. Smaller, lighter weight and open-source vendors will move more agilely.

    While larger software companies tout those architectures as well,what they are doing primarily is extending their architectures and exposing Web services to others for integration with other large enterprise systems. From that standpoint, Web services provide that connective mechanism so different enterprise software can interact. It actually can occur, and that's a good thing. But, that's fundamentally different from designing products from the ground up that take advantage of being built in a compartmentalized way to be far more flexible.

  3. Consumerization of information.

    This is the least obvious and by far the most important and compelling over the long term.

    This will have a deep impact not just on IT and the way it implements and deploys and manages systems, but also on vendors who seek to provide solutions for that environment.

    Individuals in the workplace will want their enterprise systems to better reflect the way they are able to access and use information in their consumer lives. For vendors, that means rolling out software in a different way, and building experiences in the Web 2.0 vein using rich media software layers and the like. If you don't have the elegance of the best desktop applications built into a pure Web design, you will disappoint many of these workers who expect better experiences in online or Web applications.
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