Saturday, July 10, 2004

Software customers learn to just say no

Charles Cooper comments on recent disappointing earnings announcements from some major software vendors and wonders whether it's a sign that companies are no longer cooperating with vendors' never-ending upgrade cycles:

Folks are simply tired of running like hamsters on the software upgrade mill. Unlike years past, they can select viable alternatives, such as open-source software or rent-an-application providers such as The upshot is IT directors have options that won't lock them into expensive upgrade cycles or onerous maintenance contracts. That's a handy club to beat down an obnoxiously aggressive software salesman.

For traditional enterprise software providers, any challenge to the software upgrade cycle is bad news in bells. They prefer to keep things just the way they are. The industry's dirty little secret is that in many cases, their customers do not really need to install an entirely new CRM (customer resource management) or ERP (enterprise resource planning) system. Truth be told, many probably can't even use the one they already have!
My own observation is that in the past there has been a definite pick up in activity by companies to improve their information systems. Unfortunately for software vendors, that doesn't necessarily mean that companies are willing to rip out and replace existing systems as they did in the run up to Y2K, or do a major version upgrade just because the vendor says they should. The smartest companies have learned that getting the benefits from enterprise software has more to do with business process improvement and change management and less to do with simply installing the latest and greatest new version.

Related posts
Tightwad tech spenders can't hold out much longer
IT budgets: spending less but getting more
Customers pushing back against enterprise software maintenance fees
Word on the street: IT spending is up, but not across the board

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