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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.
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 ?
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?
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/
... an upswing in the use of in-house customized solutions based on FOSS for new ventures that want to cut costs ?
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.
that's obviously why sales dried up. someone call the BSA.
More music, fewer hits
Don't worry, $10k will be worth $6,300 soon.
Repton.
They say that only an experienced wizard can do the tengu shuffle.
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.
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?
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.
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."
Advice: on VPS providers
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"
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.
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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.
> 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 thousands upon thousands pages of regulations, with variations per countries) out there, in a market composed of a handful of customers.
In that case, the cost of the software is directly related to the cost of building it (ie: how much it would cost for the customer to build his own), and such customers are perfectly happy to pay millions (yes, millions) so a software vendors take care of all the issues related to said software.
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.
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+
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.
Calling someone a "hater" only means you can not rationally rebut their argument.
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.
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!
... 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.
You are missing one important factor - the equality of the software. It might be that open source software allows some workers to be more productive, or it might be the other way round. Also, there's the fact that we're talking about software use in a company - like it or not, Active Directory makes managing massive networks trivial - changing from windows to *nix on the desktop will mean a required change in IT management of said computers. That, too, is a one-off cost, but it might make managers baulk.
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 look through them and tell me what what I was thinking when I thought I noticed something wrong?" Most people, once they've been told that bug reports need detail go through the motions of providing detail, but not up to the point of putting any thought into it. Accountants, on the other hand, understand the value of putting effort into describing a problem precisely, without extraneous detail. If you know your business, you can often go from receiving the bug report to putting your finger on the exact line of code in minutes.
Accountants are a pleasure to work with.
They have their job to do, a demanding, technical job that requires training and exactitude. It's a job that nobody else understands or wants to think about unless there is trouble, in which case they're expected to somehow conjure cash out of ledgers. If they don't, horrible things happen to everybody in the business. If they do, they might get a pat on the back an then it's back to business as normal.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
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 because they have trouble when you move the blue e' shows a deeply flawed understanding of the value of human 'capital' at a company.