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Enterprise Software Sales Dried Up In September
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."
The LCARS operating system has been in decline for years now.
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.
No shit, Sherlock. Business idiots only care about profits over the next 24 hours -- they never look at the 25th hour or beyond. That's why IT employees (who tend to actually like the work they do) hate the business side (who literally hate their jobs but make their bonuses based on nothing more than profits).
Free open source software to the rescue!
Great opportunity when there is an economic crisis to cut spending on IT and use free software to save costs.
""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?
Shai Schticks:"You don't make peace with friends, you make peace with enemies"
By much the same logic, individuals and small business may postpone their purchases...
... and torrent instead? (At least the individuals)
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.
"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 ?
Do you mean sellers of overpriced crap are not selling as much?!?!? TOUGH
"Enterprise Software" is usually synonymous with FERITILIZER.
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
how long until
The fundamentals of our economy are sound.
Literally - our economy is based completely on acoustical signals.
Well, at least they're not trying to blame piracy this time.
What?
Looking at Oracle recent quarterly report sounds rosy. Better pull my stocks out now when it is on top...
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, or a government takeover of the IT sector the way FDR tried to takeover industry. 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...
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
according tothis quarreled on SlasHdot's fanatic known
... an upswing in the use of in-house customized solutions based on FOSS for new ventures that want to cut costs ?
that's obviously why sales dried up. someone call the BSA.
More music, fewer hits
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?
But will this effect companies that use linux?
Please, oh please put SAP out of our misery. How this company got so big is beyond me. You could build a custom system from scratch in shorter order than you can customize SAP.
If you are looking for computer software for under $40.00 then visit salesplanet.ws.
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.
"All great wisdom is contained in .signature files"
Open Source CRM, would that be Sugar by any chance? I've been modifying SugarCRM for my (tiny, budget-less academic) shop to use as an alternative to JIRA (even academic pricing for JIRA is far beyond our budget, did I mention it was $0?)
We have competent labor and lots of time. Just no money, which means $0.
-fb Everything not expressly forbidden is now mandatory.
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.
Tired of FB/Google censorship? Visit UNCENSORED!
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!
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.
'I have to kill o8 an endeavour
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!
If I mod you up, it doesn't necessarily mean I agree with what you've said, sorry.
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.
putting the 'B' in LGBTQ+
I feel Enterprise Software has a good racket going.
1. The software IS expensive. Consumer apps tend to be some $50-$500. Enterprise thinks $30,000 is great. Claim is that with a they have only a few customers, so they have to charge a high price to break even. Really?! If it were priced commodity then tons of small shops would buy it, but then that destroys the bubble market.
2. Direct support on annual plans. Cram as many half-programmed features into the software as possible. I didn't say "many features, half programmed" - I duly meant "half programmed features". One version of our program crashed the entire app if you toggled a drop down. Then you get to charge support calls. Beautiful.
3. The aforementioned Consultants. Yes, config it a little ugly, but why do the consultants have to be billed at $200 an hour? Oh right. That pays for the sales staff that can sell more consulting.
4. Monopoly districts. Locks out competition in case anyone thinks of applying classical economics to the above.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
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 before, they overproduced and the rest of us sort went our merry ways right up until the time they were so many of the rest of us, they cannot produce enough. By contrast, bankers can be made anywhere, and there's quite honestly too many of them.
A quick look at the world markets bears this out. Oil is down, for sure, but it's still higher than it was a few years ago and the only reason it is down is because the world is anticipating a global recession. Surely OPEC will cut production to match, and when it does, everyone in Texas, Louisiana and Alaska will benefit quite handsomely. Similarly, all of the precious metals are quite high, as are the prices of all the basics foods.
If you want to do well in this economy, forget the MBA and Wall Street, and go for Agriculture and start a farm instead. The balance of power in the USA has shifted from Blue State (traditional services and manufacturing) to Red State (traditional agrarian and new lean manufacturing).
The interesting thing is that Obama's proposed fix for all of this, is that, even though he claims to want to help city people and people in the blue states (traditional democrats), he's actually handing Red states a giant feast. He is going to try and cut the consumption of commodities through mandated efficiencies, meaning that Americans are ultimately going to have less, but the rest of the world is still going to consume even more than Americans can conserve. None of his plans are going to bring down the prices of commodities, but they will loosen the leverage blue states have over red even further as they seek out new markets for the commodities they produce.
This is my sig.
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 time companies retrench from new projects for a year or more. Make the big bucks and be prepared for (typically) a month or two of unemployment for each $10k you were making in salary every time a recession happens.
Don't think that being available for lower paying jobs is always an option. Many employers won't look at you as they assume you will take off when the economy improves anyway.
Seems gloomy? Not necessarily. The time I do get to work on leading edge projects that increase my employer or clients' profitability gives me great satisfaction. The opportunity to mentor others is even more of an ego boost. I just make sure to bank 40% of my take home pay and keep my standard of living to the least expensive home in a neighborhood populated by real professionals (doctors and lawyers) so my kids have great schools and peer groups. My wife and I both make great geek-derived incomes, but you would never know it to look at our outward standard-of-living. Relatively cheap house, older cars, no expensive hobbies like 2nd homes, golf, boating, or season tickets to major league sports all translate to the ability to be able to put money away for a rainy day while buying all the geek toys (big tv, new computers, software, etc,)that we really want.
In addition, you may need to relocate more than once to follow the job of your dreams and value job satisfaction higher than the satisfaction of making above average wages.
You may also need to develop your "soft" skills as a manager and/or sales person as insurance to be marketable.
In my own case I added less technical certifications (M.S. and P.M.P.)to enable me to get management jobs where I was allowed to design and code as well.
I've largely worked for the joy of what I do and been rewarded when not unemployed. I wish you well and hope you will not find it to difficult choosing between the steady work of the maintainer and the sexy work of the new program with lost of customization awaiting your wisdom.
There is always the possibility that you are (a)among the best at whatever in-demand technical skills you possess, (b) have developed winning interpersonal skills, (c) developed 1st rate business expertise, (d) maintain the latest in academic and technical credentials, and (e) have the good fortune to be employed by someone with stable sales and a good balance sheet going into the recession. Meet all of these criteria and you will be fine. If not, you may have to scramble, invest in more education even though times are now tough, work more than job, and accept lower pay when it can be found,
It is no fun when you don't have those noted "keys" but one or two bad experiences may cause you to take actions to protect you for the rest of your career.
Much luck to you.
Live Long and Prosper - Thanks Leonard. You are missed.
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 only possible with full reserve banking, not fractional reserve.
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... 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?
... and then they built the supercollider.
If more Americans would learn to live within their means, we wouldn't be in this mess.
Sounds counterintuitive, yes, but if everyone lived within their means, there would be no bank credit, the economy would be approximately 1/10th the size it is now... If everyone now decides to live within their means, you would have a couple of decades of 5% - 10% per year deflation. Think the DOW at 1,000... Not 10,000.
to start to pay down all the debt that we've accumulated.
Here's the thing... Credit is ~90%-95% of all the money which exists and the corresponding debt is by definition larger than this and is increasing at the rate of (1+n%)^Y.
That's a whole lot of bankruptcies and defaults for a very long time... ~90% in fact.
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I'm not claiming the whole thing is efficient but you are seeing only part of the picture. You are looking at enterprise applications as...well...applications, regardless of what it is called - it's a service. The more reliable the service the more it costs, I'm not sure of current numbers but 10yrs ago 7 out of 10 software projects failed to make it to production status (mainly because people tend to underestimated the complexity in these systems). Where I work our last major screw up (~8yrs ago) was taking out some "mission critical" servers at one of the big 4 Japanese car companies. I was hired after the inquisition that followed, I have no idea what the screw-up cost but it wasn't cheap.
The $200/hr sales 'consultants' are small change compared to the costs of testing and if there is any large scale development (as opposed to config & intergration) then the costs will skyrocket. In the heady days of the late 90's I was charged out by the SAME employer to the SAME customer as a "bussiness analyst" for $1500/day OR as a "programmer analyst" for $1200/day OR as a "Subject Matter Expert (SME)" for $3500/day - I was payed $550/day.
You need to provide training at all times, independently of the applications you are using, sot Free Software should not be a factor in a company properly run.
As for productivity loses, well, if you have people that are not flexible enough to use different applications then you have a liability and a business risk there. Windows applications are not fully compatible amongst themselves, so why you notice this problem only if free software is involved shows you are biased and not open to fairly evaluate the options open to you.
IANAL but write like a drunk one.
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....
IANAL but write like a drunk one.
That's tripe. Something like SAP would be total overkill for a small business.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
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.
If information wants to be free, why does my internet connection cost so much?
Our software company had our best september ever selling our enterprise tools to large companies. we had six figure deals to brokerages and manufacturing just to name a couple of the dozen deals closed in Q3.
go cry wolf or sob about the falling sky somewhere else.
Yup, Magic.
You have a wonderfully shallow understanding of economics, and I'd be willing to bet it's accompanied by an equally firm belief that you're highly knowledgeable
My shallow understanding of economics tells me that every commodities company is making money hand over fist. Look at Exxon Mobil, ADM, any mining stock, all of those are up and up rather dramatically over the last year. Yes they have retrenched in the face of the global selloff, but, they are still at fairly high levels. Companies that directly service these firms are also doing really well. Drilling equipment providers, mining equipment providers, farming equipment providers, are all doing fairly well this year.
This is my sig.
Ok, thanks for the vote of confidence on SugarCRM. It's way more than we need but so far it's been working nicely as a bug tracking / communication tool. I discovered it by accident, it was linked-to from some Drupal module site.
-fb Everything not expressly forbidden is now mandatory.
Genius to tell a market was going to slow down in the economy~
The Kruger Dunning explains most post on
If a company is very profitable it can use a loan and pay it off quickly even if they can afford it.
The problem is if they spend their capital it subtracts earnings and the shareholders will have a fit. In such a case it makes more sense to borrow and have more capital on the books to make the investors happy.
Also supplies are very expensive and take up a huge portion of money. If you are a manufacturer and supplies take up 80% of your costs then its risky business to pay in cash. However if you borrow and make a profit a month later then you can pay off the debt easily and not have to spend over 50% of your capital each month. Many small businesses do not even have this capital and will go under as a result but are quite profitable normally.
http://saveie6.com/
I'm starting to see where this credit crisis has come from.
If information wants to be free, why does my internet connection cost so much?
This summer SAP jobs dropped around 33% in the summer. in 2007 it dropped, but not as significantly. Please see http://www.odinjobs.com/Odin/marketstatcompare?id=4651&q=SAP for a chart of this decline in SAP jobs