Want to read Slashdot from your mobile device? Point it at m.slashdot.org and keep reading!

 



Forgot your password?
typodupeerror
×
Businesses Software IT

Enterprise Software Sales Dried Up In September 173

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."
This discussion has been archived. No new comments can be posted.

Enterprise Software Sales Dried Up In September

Comments Filter:
  • by sm284614 ( 946088 ) on Monday October 06, 2008 @06:28PM (#25278935)
    The LCARS operating system has been in decline for years now.
  • wow (Score:5, Funny)

    by nomadic ( 141991 ) <nomadicworld@ g m a i l . com> on Monday October 06, 2008 @06:28PM (#25278945) Homepage
    As I predicted a week ago, it looks as if the third quarter was ugly for software vendors, due to the economic crisis.

    Truly you are a modern day Nostradamus.
    • Re: (Score:3, Funny)

      by Aminion ( 896851 )
      As I predicted one minute ago, you will be modded funny and me too!
    • Re: (Score:3, Funny)

      Truly you are a modern day Nostradamus.

      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)

        by MarkRose ( 820682 )
        Shortly after they port Duke Nukem Forever, of course.
        • Shortly after they port Duke Nukem Forever, of course.

          Ah Hah! More skeptics! Well, I gues this press release from 3D Realms ought to put the naysayers to rest. Now where is it? Oh yeah, here, a firm release date:
           
          "When the Leafs win the Cup"

  • ""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?

  • From TFA

    By much the same logic, individuals and small business may postpone their purchases...

    ... and torrent instead? (At least the individuals)

  • by mangu ( 126918 ) on Monday October 06, 2008 @06:36PM (#25279005)

    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.

    • Being that most Enterprise Software is more and more web based. I don't think that is an issue. Many of the actually run on a Linux background and no one in the upper offices even knows. The Baan's, SAPs don't really do anything that you need a Windows PC for (in the method that the application isn't doing any action that can just be ported to a web envrioment standards)

    • 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.

      • I really don't quite get this. If you can't buy something because *credit* has dried up, then well the fact is that you didn't have the money in the first place. If you can only "afford" something with a line of credit, then by definition you couldn't afford it in the first place, right. Same logic applies for companies.
    • I doubt very much, if any at all. How does a company with 10,000 computers pay for software? It's not from savings. They get it from their credit lines, same exact way they bought the computers. Before the Sept 17-18 credit freeze (during the 12 hours in which credit was pretty much impossible to get in the United States), 90% of people/companies with good credit were given a loan on walk in, that number is now 60% and falling. All the money that those loans used to backed with were pulled out of Mutua

      • It is these 21st century bank runs that's causing banks whose foundations are completely solid to go bankrupt over night.

        Listen to what you just said...

        Businesses which are completely solid simply do not go bankrupt overnight.

        Banks are not solid businesses, none of them. All of them lend fractionally, which means that there isn't a single bank in the world which could not be taken down overnight. They are all inverted pyramids of debt piled on a tiny base of real money. They are the very definition of borrowing from Peter to pay Paul.

        If banks were completely solid, they could survive a bank run and remain solvent. That is onl

  • "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 ?

  • by Reality Master 201 ( 578873 ) on Monday October 06, 2008 @06:42PM (#25279059) Journal

    The fundamentals of our economy are sound.

    Literally - our economy is based completely on acoustical signals.

    • McCain is right. The economy is fundamentally sound. You just have to be in the right spot and right now, farming is in and white collar is out.

      What is happening is that rising commodities prices, due to economic growth, have forced a realignment towards commodities spending over value added services and manufacturing. What Friedman missed, when he wrote that the earth is flat, is that, you still need valuable land to farm and to mine and to drill, and those people are now the scarce thing, whereas befor

      • Surely OPEC will cut production to match, and when it does, everyone in Texas, Louisiana and Alaska will benefit quite handsomely.

        As someone in Texas working in the chemicals industry, let me say BULLSHIT.

        All of those plants in east Houston and northeast Texas make shit besides gasoline like LOTS of different kinds of plastics, additives, adhesives, resins, and coatings. All of us pay through the nose for our feedstocks (natural gas and alkanes), even the huge chemical divisions of major oil companies like

        • by tjstork ( 137384 )

          Oil prices go up == feedstock prices go up == profit/wages go down.

          Oil prices are everyone's base. If feedstocks are going up, you pass the cost in your produced product and get away with it. Trucking companies do this and make out well.

          That oil will be sold on the global market and make essentially no difference in prices at both the consumer gas pump and the commercial feedstock suppliers. This isn't 1980 anymore, you might want to update your mental map.

          You've made my point perfectly. Worldwide deman

          • Oil prices are everyone's base. If feedstocks are going up, you pass the cost in your produced product and get away with it. Trucking companies do this and make out well.

            Wrong. When your feedstocks are going up you make less money. Sometimes you can raise your prices enough to partially offset this, but usually you cannot. Our feedstocks are double what they were a couple of years ago. We can't double our prices, and none of our competitors have been able to do this either.

            Higher oil prices only benef

  • by iminplaya ( 723125 ) on Monday October 06, 2008 @06:48PM (#25279105) Journal

    Well, at least they're not trying to blame piracy this time.

  • 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:

    • 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.

    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...

    • 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.

      • by Panaflex ( 13191 )

        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!

        • by afabbro ( 33948 )

          No... he meant $700 bucks, punk.

          Ah, if only it was $700 for every man, woman, and child in America. That'd only be $210 billion

    • by nurb432 ( 527695 )

      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)

      by couchslug ( 175151 )

      "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

      • by wytcld ( 179112 )

        Learn some handyman/craft skills (carpentry, plumbing, drywall, auto repair)

        Lord knows there are plenty of carpentry, plumbing and drywall jobs available in the housing boom, not. Construction spending is down by 50% in Vermont, which never was part of the boom (or the subprime mess for that matter). I shudder to think how many jobs are lost in construction in the boom states. Plus, at least in the boom states, most of the drywall jobs have been held by illegal immigrants.

        Auto repair, on the other hand, wil

    • by oldhack ( 1037484 ) on Monday October 06, 2008 @10:06PM (#25280571)
      I think this bust is much, much worse than the dot bomb. Dot bomb, despite all its excess, produced wide-spread internet coverage, computer as utility/appliance, web tech/commerce, and much improved communication infrastructure. This bubble was a sheer paper and real estate speculation - the only thing left are vandalized McMansions in locations unsuitable both ecologically as well as economically. All with borrowed foreign capital that will surely change the dollar's place as the undisputed foreign reserve currency.
      • Actually, the dollar is up as a result of this because the rest of the world is at least as badly affected by this, if not more.

        Also, the major part of our debt is to the American taxpayer via borrowing from Social Security and Medicare. I think the US Gov owes the American taxpayer approximately 59.1 Trillion, whereas it had about 5.3 Trillion in public debt debt of which, not all is foreign (Citation [wikipedia.org]).

        It makes you wonder why we need a new plan to replace Social Security. One idea may be to pay back th
    • Why are so many people around here afraid of their own worth?

      Take a cut in your salary if you must, or become more skilled (remember, the cheap guys in India are still there: Hello guys in Mumbai!) but frankly I am not going to start to unblock toilettes for a living....

  • Would this mean ... (Score:5, Interesting)

    by slashdotlurker ( 1113853 ) on Monday October 06, 2008 @06:54PM (#25279163)
    ... an upswing in the use of in-house customized solutions based on FOSS for new ventures that want to cut costs ?
    • 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

    • by nurb432 ( 527695 )

      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.

  • by OglinTatas ( 710589 ) on Monday October 06, 2008 @07:12PM (#25279277)

    that's obviously why sales dried up. someone call the BSA.

  • This sucks (Score:5, Insightful)

    by coldtone ( 98189 ) on Monday October 06, 2008 @07:29PM (#25279445)

    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)

      by Anonymous Coward

      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)

      by grcumb ( 781340 ) on Monday October 06, 2008 @07:53PM (#25279611) Homepage Journal

      I've been in the business since 98. Are these 5 year cycles normal?

      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.

    • It's simple. You have to accelerate your net worth faster than the acceleration of inflation. Here's a hint: you won't do that a job. You also won't do it while self-employed. The only way is to build a business that grows faster than inflation, or invest in a way that yields results higher than inflation.

      Normally, that would be pretty easy. But right now, the central banks of the world are wrecklessly dumping money into the world economy -- deflating the value of the dollar very fast. You may have noticed

      • Re:This sucks (Score:5, Informative)

        by the eric conspiracy ( 20178 ) on Monday October 06, 2008 @10:32PM (#25280727)

        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.

        • The US dollar is appreciating greatly vs. the Euro, because at least the US realizes the problem and are acting with concerted vigor.

          Only as long as nobody starts dropping the dollar due to overinflation. Which is on the radar right now for quite a few high-ups in the money world. And then God help America.

    • I've been in the business starting as a programmer progressing to a DBA and now a PHB since 1979. Thus the basis for my observations:

      Most of those programmers who make average or below average wages, (see www.salary.com) work for big companies, enjoy maintenance, and keep their desirable skills current, and work ethic sharp will work right on through each recession.

      Go "for the brass ring" and hold out for the high paying consultancy jobs or work on leading edge development will make you expendable each

  • by IGnatius T Foobar ( 4328 ) on Monday October 06, 2008 @09:13PM (#25280149) Homepage Journal
    Remember the dark days of the dot-com collapse? Microsoft's advertising slogan for Windows 2003 was "Do More With Less." It's ironic because their server software is one of the most expensive in the industry. The "Do More With Less" slogan is far more appropriate for open source software, which you can support in-house if you have the skill set on board.

    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.
  • by Anonymous Coward

    I don't know what you guys are worried about. All this panic and fear, you just got to invest right.

    My pumpkin stocks have been increasing steadily through September and have already doubled during this first week of October. I got a feeling they're going to peak right around January. Then bang! That's when I'll cash in!

  • Good news/bad news (Score:3, Interesting)

    by plopez ( 54068 ) on Monday October 06, 2008 @10:30PM (#25280717) Journal

    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)

    by dangitman ( 862676 ) on Tuesday October 07, 2008 @02:49AM (#25282503)

    ... 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)

      by geekoid ( 135745 )

      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.

  • Genius to tell a market was going to slow down in the economy~

Think of it! With VLSI we can pack 100 ENIACs in 1 sq. cm.!

Working...