I wish I could say that Id be laughed out of the industry, but Im afraid thats not necessarily true. The reason? The hype cycle is out of hand, and all too often hype no matter how ridiculous is given equal time with reality.
The Future of ERP
Microsoft/SAPs Duet: Swinging for the Hills
Until reality starts to catch up to and overtake hype, too many gee-whiz acronyms and cool ideas will be chasing too many confused IT buyers, who in turn will continue to let their confusion lead their buying decisions or lack of buying decisions, to be more specific. And therein lies the origins of real problem for real software companies.
I say this as the current earning season starts with a whimper, not a bang. SAP just warned, there are problems over at Intel, tech stocks are dropping, and the pessimists are starting to talk about a general slump in IT spending that could make 2007 a pretty lousy year for all concerned.
Meanwhile, Im reading more about how Web 2.0, Office 2.0, and every other manifestation of what is really Dotcom 2.0 is going to take over the world. A world that, I will add, swoons every time Google bats an eyelash, as though this advertising company has done anything other than disintermediate traditional media companies from their revenue.
And then theres software as a service which somehow means the end of software, according to Salesforce.coms Marc Benioff, as he touts his latest attempt to sell more software by morphing into an infrastructure player. SaaS is a great idea, dont get me wrong but anyone who think SaaS has any value without substantial functional differentiation doesnt understand the difference between service delivery using a model as old as the hills (timesharing), and genuine innovation.
Did I mention SOA? Heres where I have to leave the world of irony for a bit and make a fabulous prediction. SOA has been part of the reason for the slump: SOA was oversold and underdelivered by pretty much everyone in the business even those who said from the get-go that SOA was going to be hyper-hyped until there was actually something there to sell.
That something is now here, and if anything leads the market out of its current doldrums it will be SOA. Every customer I talk to is doing SOA, and doing it for the right reasons: small, midmarket, and multi-national, SOA is about to take off.
Of course, that doesnt necessarily turn it all around. SOA will only lead the market, it wont constitute the revival of the entire software market by itself. Because what the market wants and what I still think is missing is functional differentiation and genuine innovation. SOA will be a platform, just like SaaS is a platform. But it will be up to the real innovators to sell something substantial to make the platform worthwhile.
I think the enterprise software market and the enterprise software buyer have to think long and hard about how to disentangle themselves from the hype machine that is confusing, not clarifying, the direction of technology today. You cant get something for nothing, no matter how hard you try. Software companies are going to have to remind everyone that they make products, and those products cost money, despite market trends that try to pretend that value and cost are unrelated. And customers will have to remember that they need to pay for value, instead of just assuming it arrives for free on their companys T1 line as part of their birthright.
Until a little reality arrives, well be stuck in a surreal world full of lots of great products from real companies and lots of real money from genuinely interested customers trying, and failing, to find each other through the fog of hype. Its a slump alright but one that we all helped make and that we all have to help undo. Or else.