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Thursday, December 29, 2005

Enterprise Predictions for 2006

These are the comments that I posted in Vinnie’s site upon seeing his 2006 enterprise software predictions. In general, buyers are more cautious and would not easily get sucked in vendor speak – lot more detailed evaluations and price negotiations, clarifications can be expected – the average sales cycle may also increase for enterprise players – not shorten as expected due to consolidation effects.
Point 1 – Agreed on the marketing fronts– But I expect a much more renewed aggression from SAP in the marketplace and Oracle sharpening its focus given that the whole world is looking at how they are going to move forward – I believe that both SAP & Oracle shall be forced talk more about architecture in the new year – Agreed Oracle’s emphasis could be a heard more. In fact I expect Web Services/SOA to get more pronounced inside enterprises – agreed that these need not be just centered on SAP/Oracle.
Point II – Integration of RFID,RSS & GPS would certainly happen – but not sure if we shall see Ver 2.0 now – the fatigue of enterprise s/w overspend is still felt by CIO’s at all levels.
Point 111- Fully agreed- BPO shall see more and more push . Already financial services are beginning to look at leveraging social networking media aggressively
Point IV – Not sure – may not happen that fast – not in 2006
Point V – Agreed – we shall see the re-emergence of small super specialists – The world would see more of the E2opens and likewise new model consulting & service firms.
Point VI – Fully agreed – If I may add customers would begin to demand the benefits of offshoring /global delivery that these yesteryear big guys so eloquently talk about. Indian headquartered vendors would be moving/growing faster then ever into newer arenas. here as well.

On the rest of the points : China would see more of global / Indian HQ big players leveraging it for supply – but volume growth may just be gradual – am skeptical about chinese service firms making acquisitions oversees and growing – certainly not in 2006. On SaaS – I find that the vendor offerings would improve –the movement has succeeded in creating mindshare amongst buyers - now it the time for the SaaS players to step up aggression – many of them have not scaled up in terms of their reach and may need to be step up engineering and sales efforts much more significantly to tap the opportunity. Storage management, asset digitization would see lot more spend in 2006. Compliance management and benefits are getting debated already – but are bound to become more shrill – with so much money going in there – Surprising that enterprise vendors and service firms are not visibly lobbying for its continuation/making it more tight – given that they are the best beneficiaries of this. I also see the consolidation efforts amongst small software product players ( some of them walking dead) continuing to happen in the new year and some consolidation happening in the mid to tail of the Indian headquartered offshore service vendors and small product vendors leveraging offshore lot more aggressively for engineering works. New technology absorption/offerings in the enterprise space shall continue to be felt at the small product player levels before the big guys begin to embrace- to that extent the ecosystem shall remain vibrant. You can see the comments here.
I would like to add a few more things related to the post here:
A. The big guys would also be pressurized to share the price benefits of engineering getting offshored and I expect atleast one major announcement of support price coming down due to offshoring.
B. We shall see the enterprise guys making investments/acquisitions in new age technologies like RFID – The SME market segment opening up shall see a new equation emerging in the enterprise space – the traditional No.1 /No.2 may not necessarily hold good.
C. I also see that the best-of-breed vendors talking a decisive position in terms of offshoring most of their engineering or close to near full co-option of India HQ service firm consultants masking as their PS arm.
D. I see greater adoption of BPM solutions amongst large and medium enteprises.
D. I anticipate far more adoption of web services and SOA in the new year - not necessarily centered on offerings from establiched players

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