Enterprise software in flux

The world of enterprise software is fundamentally changing. This is not the enterprise software market of old with its bloatware, n-year implementations, painful upgrade cycles, fragile interfaces and ROI analyses that can charitably be described as "aspirational". Just look at two news releases today:

• First, SAP announces a hosted solution for the middle market. This in the face of a negative market reaction to their mid-market foray due to increased customer acquisition costs and lower margins.

• Then, hot on the heels of IBM's announcement yesterday, Oracle announced WebCenter Suite - its own Web 2.0 offering. A great example of "me-too" press, although Oracle had actually first talked about this product a few months ago and failed to capitalize on it.
  

I don't recall a time when there was this much uncertainty in the enterprise software market. The large vendors are scrambling to accommodate entirely new areas of functionality (collaboration, participation) that are antithetical to today's centralized way of providing IT-enabled value. At the same time, the delivery models have shifted to subscription-based, hosted services. The big players are struggling to keep up while not abandoning their current , highly profitable, product franchises.

All this means there's a huge opportunity to innovate in enterprise software. And the place to start is in fast-growing but still-developing countries with a need for IT, but under served by the large global players. The need is acute, the new delivery models match well with the lower capital expense outlays common in these countries, and there is no legacy to overcome. Just like the old order is slowly turning over in consumer software, there is no reason to believe that today's dominant providers of business solutions will be dominant tomorrow.