Software spending to stay down, but Microsoft doing "Ok"
Rich Sherlund, long regarding as the analyst on Microsoft in particular and sfotware in general, issues a very busy report today taking down earnings estimates for about 25 companies in the softawre sector. He says that spending is going to stay flat to slighty lower for the rest of the year, with only marginal pickup in 2003.
Fresh from a visit to Microsoft, however, he said they were doing "ok". I guess it wasn't good enough to warrant a third syllable.
Well, that's a relief.
Would that all software executives were this smart
Very impressive interview in the new Fortune with PeopleSoft CEO CEO Craig Conway. Highlights:
How have customer attitudes shifted during this recession?
The mantra now is getting ROI within the same fiscal year.
While that's nice, obvious and probably more than a little overdue. But this point is truely impressive, and indicates the huyge degree of complexity involved in making this investment pay off (emphasis in the quote below are mine):
What's happening now in software for companies?
There's a bright spot on the otherwise dark tech landscape: the transformation of companies when they put business processes onto the Internet. Even in this down economy companies are continuing to build what we call a real-time enterprise--putting all their processes online in an integrated way. For example, a product company starts with lead generation, marketing, and sales. Then you enter an order, get it to inventory, ship it, update accounts receivable, get out an invoice, collect payment, and finally support the customer. Each of those processes is traditionally thought of as a different software application. Lead generation, marketing, and customer service are CRM [Customer Relationship Management]. Order entry, shipping, and inventory are Supply Chain Management. Invoicing and collections are Financial. But now companies are making all those processes accessible through a Web portal, so you can move between applications in a nonlinear manner.
I maintain that accomplishing the highlighted phrase is really really difficult. It's hard technically, its hard from a business process standpoint -- because it demands that you absolutely rethink everything about hte way you do business, internally and externally -- and its hard from a cultural/organizational/political standpoint. And, oddly, taht argues against the ability of companies to be able to see ROI on investments in the same fiscal year. One of the responses that companies have had during this tech downturn is to chop up their projects into smaller, discreet pieces. But the vision that Conway paints aboe is that a fragmented approach is not going to deliver the end to end benefits that are possible. In fact, this stuff might not even have a compelling ROI when done incrementally. An example of the false economics of piecing it out?
11:21:57 AM 
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