Slashdot Log In
Enterprise Software Sales Dried Up In September
Posted by
kdawson
on Mon Oct 06, 2008 06:25 PM
from the surprise-surprise dept.
from the surprise-surprise dept.
CurtMonash writes "As I predicted a week ago, it looks as if the third quarter was ugly for software vendors, due to the economic crisis. SAP said 'The market developments of the past several weeks have been dramatic and worrying to many businesses. These concerns triggered a very sudden and unexpected drop in business activity at the end of the quarter.' My old acquaintance John Treadway, who used to work in Sybase's financial services vertical unit, reports that things are even worse than that in the financial services industry, Wall Street and retail banks alike. So now what? Well, IT is a huge part of capital spending, and at enterprises that have to cut back capital spending, IT is going to get hurt. On the other hand, high-growth companies — Web businesses, analytic services providers, etc. — may try to power through the downturn. And the more directly an IT project affects near-term profits, the more likely it is to survive."
Related Stories
This discussion has been archived.
No new comments can be posted.
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
Full
Abbreviated
Hidden
Loading... please wait.
No real suprise there... (Score:5, Funny)
wow (Score:5, Funny)
Truly you are a modern day Nostradamus.
Re: (Score:3, Funny)
Re:wow (Score:4, Funny)
Fail
Parent
Re: (Score:3, Funny)
Looks that way. Now when does Linux takeover the desktop market?
Re: (Score:3, Funny)
Looks that way. Now when does Linux takeover the desktop market?
Let me consult my oracle [purdue.edu]:
Hmph. Outlook not so good.
Maybe it means that Thunderbird will start to take over ... ;)
Re: (Score:3, Funny)
A shotgun, a bullet, and a prayer. (Score:2)
""As I predicted a week ago, it looks as if the third quarter was ugly for software vendors, due to the economic crisis. "
And FOSS's role in all this?
Consumer Cash Crunch (Score:2, Funny)
By much the same logic, individuals and small business may postpone their purchases...
... and torrent instead? (At least the individuals)
How much is Vista to blame? (Score:4, Interesting)
I think people are putting off some investments while they wait to see when will the next Microsoft OS come out. People are afraid to replace something that's more or less working with something that has been so criticized as Vista.
I work for a software vendor... the answer is no (Score:4, Informative)
This is a silly question. Windows of course has nothing to do with the problem. People are putting off software investments because they can't afford it. Credit has dried up and businesses can't get capital to spend on expansions. Smart businesses see software as an investment to grow, but if there's no business to grow into, or they can't get the money, then they don't invest and grow slowly, along with the rest of the economy. Now instead of floating loans they have to save money.
Automobile repair shops are doing very well, because more people are repairing cars rather than buying new ones. Same goes for software. Why buy new software and hardware when you can maintain the old.
Parent
a week in advance.... (Score:2, Funny)
"As I predicted a week ago, it looks as if the third quarter was ugly for software vendors"
Any chance you got next weeks lotto numbers there as well ?
But don't worry (Score:5, Funny)
The fundamentals of our economy are sound.
Literally - our economy is based completely on acoustical signals.
due to the economic crisis (Score:5, Insightful)
Well, at least they're not trying to blame piracy this time.
How much were you making in 2003? (Score:5, Insightful)
That being the tail end of the Dotcom Bust shakeout. Here's a hint: you might want to go ahead and downsize your lifestyle so you can live on that again.
I sincerely doubt we're going to see 25% unemployment, Smoot-Hawley II [wikipedia.org], or a government takeover of the IT sector the way FDR tried to takeover industry [libertyforlife.com]. But it's quite easy to imagine Dow-Jones hitting the 7,300 level, and venture capital frozen until the credit markets thaw. You better be prepared to last it out.
You might want to:
The economy will come back, just like it did after the Dotcom Bust (assuming the $700 bailout isn't as destructive as the Japanese propping up zombie banks for a decade after their real estate bubble burst), but in the meantime it could be a long, cold winter...
Re: (Score:2)
Wait a gosh darn minute. You mean the bailout was only for $700, no wonder it didn't -- Oh, you meant $700 Billion, never mind.
Re: (Score:2)
No... he meant $700 bucks, punk. Now pay up. We'll be back next week for the next payment.
It's good to be a Banksta, yo!
Re: (Score:2)
The economy may or may not return to where it was, but i don't see the IT world coming back as well as the rest.
In general we have engineered ourselves out of work by increasing efficiency, and reducing the # of people needed.
And yes, alternative skills will be a necessity if you like to eat...
Re: (Score:3, Insightful)
"You might want to:
* Start increasing your savings until you have a year's worth in the bank, if you don't already.
* Learn as many new skills as you possibly can, in case you need to find a new job in a tough market.
* Learn some handyman/craft skills (carpentry, plumbing, drywall, auto repair) to get you a survival wage while IT jobs are scarce."
Those have ALWAYS been excellent ideas. Numbah Three can save you big money
Re:How much were you making in 2003? (Score:5, Interesting)
Parent
Would this mean ... (Score:5, Interesting)
Re: (Score:2)
Yes it does, for some things. Last year we replaced an oursourced Ticket tracking system wiht a LAMP solution grown inhouse. The "free" was a big swayer. Right now I am working on the next version that will replace another outsourced system with the same home grown LAMP stack. I did recommend a Open Source CRM system over the closed up commercial crapware they are looking at and I was slapped down.
It all depends if Management is open to it. You tell them Google and others run off this stuff and they underst
Re: (Score:3, Informative)
Yes, I recommended they "look" as SugarCRM. I told them we that we could extend it and plug it into lots of different systems with just our in-house knowledge. But they have already gone too far down the vendor selection path and don't want to confuse the business folk, blah blah blah. Those managers are closed minded when is comes to FOSS. I told them there was a pay version, but I don't think Sugar showed up on the Gartner report they are using to pick a vendor.
Re: (Score:2)
Not enough to make a difference.
Most smaller companies dont have the manpower to do something like that now, and with the hard times coming it will only get worse.
And there aren't enough of the large ones that need to.
ZOMG piracy! (Score:3, Funny)
that's obviously why sales dried up. someone call the BSA.
This sucks (Score:5, Insightful)
From what I have personally experienced, and seen in the market in general it was not until mid 2003 that we saw a recovery from the dot com bust. It's only been five years, and to be honest wages have only recently gotten back in line.
How the heck am I supposed to get ahead when these downturns happen every 5 years or so? How does one build wealth, get married and raise a family? I mean I just got my 6 month emergency fund restocked, and now I might have to use it?
I've been in the business since 98. Are these 5 year cycles normal?
Re: (Score:2, Insightful)
The dot-com bubble/burst was more of a minor trough within a much larger 'super-cycle'. This is the big one that is going to be much, much harder cross far more industries and last much longer.
Re:This sucks (Score:5, Informative)
Short answer: Yes. If by normal you mean recurrent.
Slightly longer answer: The number has in the past been greater than 5 years, but recently we seem to be tightening the loop between boom and bust. Likewise, many of the past booms and busts have not appeared to be quite so catastrophic as this one.
I've been in the workforce since the late 70s, and paying attention since a little before that. I've seen downturns of various kinds in every decade.
And yes, the US economy is more or less predicated on a boom/bust cycle. But don't take my word on it; greater minds than mine have looked at the phenomenon. Start with wikipedia [wikipedia.org] and keep going from there.
Parent
Re:This sucks (Score:5, Informative)
Most major financial institutions are undergoing a major deleveraging process which decreases the overall debt to equity ratio in the economy. This leads to a massive destruction of money supply and a crash in the value of assets in the economy, which we are seeing a start of with continuation of decreased real estate, equity and commodity prices, and unavailability of loans even to the largest and most stable entities in the US. This value destruction definitely exceeds 5,000,000,000,000 dollars over the last 12 months at this point in time.
It is getting to the point where some states are facing bond defaults because they cannot borrow at reasonable terms. Giant corporations like GE are facing a real prospect of bankruptcy because they cannot borrow working capital despite having a 22:1 asset to debt ratio. If the US Government were not trying to counter this by pumping money into the economy we would surely be looking at the stark reality of a depression.
The US dollar is appreciating greatly vs. the Euro, because at least the US realizes the problem and are acting with concerted vigor. The EU's economic policy is total shambles with individual countries acting unilaterally rather than in concert, and the refusal of central banks to lower interest rates. Some analysts think this may get bad enough to destroy the Euro as a currency. At the very least it has put an end to any talk of the dollar losing it's special place as the international reserve currency. Some small countries like Iceland, Ireland and Greece are on the edge right now. Iceland's problems are so bad that they are having difficulty importing food.
There is no practical limit to the ability of the US Treasury to pump money into the economy by loans against hard assets. The question is how much and how fast is needed to accomplish the desired effect, and can it be done without overshooting on the other side.
Parent
Re: (Score:3, Insightful)
Bush may be a babbling chimpanzee, but that is still better than the European version which a committee of babbling chimpanzees trying to agree on a solution while have side feces throwing fights.
"Do More With Less" (Score:4, Insightful)
And that is how it shall be if the economy takes another downturn. Open source software will thrive -- it's already bigger than it was in 2003 -- as more and more "enterprises" (gosh I hate that word) discover its incredible value prop.
Good news/bad news (Score:3, Interesting)
Good news for F/OSS which can provide functionality and flexibility for companies at lower prices.
Bad news for expensive software packages, esp. low quality packages.
Good news for software that can provide years of functionality and ROI.
Bad news for brittle and inflexible software tha requires constant maintenance or an upgrade treadmill, i.e. no ROI.
Good news for lean software which can run on older, leaner and less expensive software.
Bad news for software which requires major hardware upgrades.
Maybe a bit of sense and sanity appear in purchasing or building software.
Or maybe... (Score:4, Funny)
... Enterprise software just sucks?
There must be something wrong with your product if sales can just drop off so suddenly for no real reason. How can you blame this on an economic crisis? If people really need your software to do business, then they will buy it. Perhaps that software wasn't really necessary in the first place, if a small market downturn has such an extreme effect?
Re: (Score:3, Insightful)
Everything dropped down all of a sudden.
This isn't some software only thing. Enterprise software is expensive, and every business is tightening there belts to see where the market is going. You would have to be nuts to start an expensive process that isn't critical to your operation right now.
Most people buying enterprise software is looking at a return a year or later after they go live, which can take over a year in it's self.
Re: (Score:2, Insightful)
With enterprise software, you're not paying for the software as much as the army of consultants required for implementation and integration, which, while not rocket science, is far from trivial. Of course, this is usually done incompetently and expensively, but even if it weren't it would still, in most cases, cost way more than a measly 10K.
Re:Noo, really?!?!? (Score:5, Informative)
Right, if you are programmer and are willing to accept minimum wage, with no benefits.
Spoken like a kid who never had a job. Tell you what, we are a software company, and I can tell you that programmers cost a lot. Software development is darn expensive too. And you have to add up all the continual training cost for our staffs, not just the initial training to get them up to speed.
I hate to break that to you, not all softwares can sell millions of copies per year, certainly not enterprise softwares. You are not selling burgers here. A lot of companies would be really happy if they can sell 50 copies per year. Customizations, services, support, etc, all very expensive work.
Go to take a look at the "enterprise softwares" first, make sure you even know what all those terms mean (I'm not even talking about implementing them), and make sure you understand all the regulations/rules involved in the industry, yada yada yada... and then, we'll talk.
Parent
Re: (Score:2)
I concur. There are many things that can cause software to suck - one of them is the number of users who have tested it. If you're running a $10 million software package, chances are that you're one of a few dozen or a few hundred other companies doing so. If it's complex overreaching software like an ERP or CRM package, you'll likely run into several new bugs every day. It's also likely that you will be the very first cu
Re:Noo, really?!?!? (Score:5, Informative)
If you're paying a lot of money for software odds are you are being taken advantage of. No software should cost more than $10k Exception: scientific software (and I mean the really advanced stuff, simulations, etc), math analysis, etc, etc AND EVEN THEN
Well, as much fun as sweeping generalizations are...
There is some fantastic commercial, enterprise software out there, the likes of which FOSS cannot touch. I'm a DBA and love Postgres, and to a lesser extent MySQL, but neither has the breadth of features or capabilities that Oracle has. Postgres is a great product, but it's like Oracle 7...there's a big difference between it and Oracle 11g. And yeah, there are a lot of shops that don't need that difference, but there are a helluva lot of shops that do.
That's just to take databases. There's a wide variety of engineering software that I've supported over the years that is just not going to be touched by FOSS people any time soon and represents literally tens of thousands of man-hours of development time. My employer uses some really intricate software designed for our old-school industry that would take hundreds of thousands of dollars to develop in-house...and no FOSS group is going to say "hey, let's do that in our spare time for fun! And also make sure it works with everything else!"
I agree that big ERP packages are often big nightmares and yes, there's a lot of junk out there, but you can't just say "if you pay a lot for software, odds are you're being taken advantage of."
Parent
Re: (Score:3, Informative)
> No software should cost more than $10k Exception: scientific software (and I mean the really advanced stuff, simulations, etc), math analysis, etc, etc AND EVEN THEN
Obviously, you work in the scientific sector, and also have a pretty narrow-minded view.
Having written other kind of software, I can tell you that you the complexity involved in "enterprisey software" can be mind boggling. For instance, think about reading, implementing and deploying some of the complex financial rules (we're talking about
Re:Noo, really?!?!? (Score:4, Funny)
Don't worry, $10k will be worth $6,300 soon.
Parent
Re: (Score:2)
Many projects in the financial sector require 100s of developers and 1000s of man-months
How many developers went into Windows Vista??
How does that compare in complexity to software that is essencialy a bunch of fill-out forms, badly implemented, done with no usability in mind, and that doesn't work properly (EVEN when compared to Vista)
Guess what, hire 10 really good developers and they will do a much nicer job.
If you work with geeks, you'll know... (Score:3, Funny)
Clearly you don't have any experience "hearding cats" or implementing large systems. If I followed you're advice I would get 10 'nice' applications, none of which address the problem at hand.
Look on the bright side, you'd get them in 15 different languages!
Re: (Score:2)
Oracle's results are similar to SAP's... 12-14% YoY gains this quarter, but a very poor end, which doesn't bode well for the current quarter.
Keep in mind that both Oracle and SAP hiked prices across the board earlier this year, Oracle was about a 15% hike... which means they've lost net customers if their revenues have not increased 15% YoY. Whic
Re: (Score:2, Insightful)
And tech idiots never look at the business cases, or how their little fiefdoms of compliant machines might not actually be of any value to anyone but themselves. IT is a support function, not a reason unto itself.
Re: (Score:3, Interesting)
And tech idiots never look at the business cases...
Where I work we actually like downturns in the economy. We do IT consulting and while our clients do spend significantly less overall during a downturn a sufficient percentage of the budget shifts from hardware with no margin to services, (high margin), keeping the old important stuff running that we actually come out better for it!
Re:Free open source software (Score:4, Insightful)
I know these people and I have always wondered how anyone so computer-illiterate could add any productivity to any business.
After plenty of observation the answer more often than not was: They don't.
Thus the solution to your concern is really simple: Fire the person who cannot work when "the blue e has moved" and fill the position with someone who can.
Parent
Re: (Score:3, Insightful)
Fire the person who cannot work when "the blue e has moved" and fill the position with someone who can.
Many, many, companies (mine included) have hardworking, productive employees who aren't necessarily very computer literate. "Mary in accounting" might be a bookkeeper with 20 years of experience with a company's processes and workflows, may manage the relationships with vendors (and by extension impact cash flow) etc. etc. etc. - Losing her may indeed cost the company money, and saying 'fire an employee
Re:Free open source software (Score:4, Interesting)
Training is a once off cost. License fee's come round every year. Free software tends to make up for itself after a few years, the only real impediment to moving is 1. US style CEO's dont think past the current quarter, 2. the current system is good enough (although MS is trying to change that with Vista)
If Mary is a CPA or has some accounting knowledge then she's smart enough to realise that if she doesn't learn she'll be looking for a new job. In "mary's" defence, most accountants I've worked with are more computer literate than many Developers I've worked with, some how coding and good computer use don't tend to go hand in hand.
Whenever a person is inducted into an organisation they will receive training anyway, even with the upgrade from 2000 to XP people needed to be trained and introducing people who cant think for themselves to Vista will have as much of a problem as if you moved them to Linux. People with half a brain (problem solving ability) are less of a problem and can figure out something like Ubuntu of Fedora Core in 1/2 and hour.
Incompetent people will not learn no matter how much training you put them through, all you can do is tell them where to click, you'll have to do it again after the next coffee break anyway no matter what operating system they are using so they may as well use the better OS.
Parent
Re: (Score:3, Insightful)
Re: (Score:3, Insightful)
Accountants have been, hands down, the best clients I've ever had. They're not afraid of hard work. They don't treat every issue that takes more than 60 seconds to explain as a personal attack. They know what they need to get their job done, and know what they want from you.
Accountants submit, by far the best bug reports. No, "Something went wrong the other day, I don't remember exactly was, but here are 100 screenshots with every dialog in the application, including the login screen, could you please