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Tuesday, November 15, 2005
Enterprise Software : New Model Ahoy!
Larry Augustin writes,"The traditional enterprise software business model is broken. A rabid search for new customers and revenue growth has caused sales and marketing costs to spiral out of control. In fact, Rick Sherlund at Goldman Sachs estimates that in 2005 software companies will spend 82 percent of new license revenue on marketing and sales efforts. That's up from 66 percent in 2000. While tech continues to benefit from "mini-waves" of technology shifts (e.g.,wireless), there are not the rapid, landscape-changing shifts that drove feverish growth in the 90s. In addition, many of today's technology trends actually serve to reduce aggregate IT spending.
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