Companies Reportedly Buying More Software As A Service
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TechWeb - The portion of new business software revenue generated from SaaS products is expected to increase to 25 percent by 2011.
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A Forrester Research study finds that corporate users are becoming increasingly frustrated with the license and maintenance costs of enterprise applications.
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Security technologies delivered via the SaaS (software-as-a-service) business model may still be in their nascent stage, but some early adopters are already piecing together multiple offerings to outsource a significant portion of their IT systems defense infrastructure.
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Perhaps lost in the acquisition discussion is how it could help Microsoft with its software-plus-services strategy for delivering business apps over the Internet.
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The business software company surpassed Wall Streetâs projections as the company reported a sharp rise in new software licenses.
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Many companies are already dabbling in one or more virtual worlds or closely observing them.
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The companyâs acquisitions in growth platforms mean more technologies to tap into for use in its other businesses.
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Software makers are eyeing more ways the one-computer-as-many approach can help businesses and beyond.
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While most of Oracle's recent purchases have focused on growing its applications business, the vendor's latest proposed purchase will beef up its growing identity management operation.
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Purchase of Pilot Software part of SAP's ongoing strategy to expand product line via acquisitions.
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Just as Microsoft&#39;s (MSFT ) core businesses -- its Windows and Office monopolies -- are slowing down, it has found a new engine for growth: server software.
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Vendors of enterprise resource planning (ERP) software can expect their market to become more buoyant as companies ponder purchasing new systems or boosting the functionality of existing ones, according to ...
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World's largest software maker is pursuing companies who register variations of its key brands.
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Company looks to juice its application server business with a version tuned for smaller organizations.
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Some vendors and analysts are critical of the open-source application stacks that some major vendors are offering as an integrated software alternative to similar proprietary products.
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A new report from Forrester Research declares that the wave of mega-acquisitions in the software industry is over for now, though big vendors will continue to snap up smaller firms as they round out their portfolios.&quot;We do expect more consolidation to occur, but predict that the acquisitions of&#160;Business Objects by SAP,&#160;Cognos by IBM, and&#160;Oracle&#39;s renewed bid for BEA&#160;will be the last hurrahs in this cycle for super-sized acquisitions within the software industry of vendors with more than $1 billion in revenues and deal sizes of $5 billion or more,&quot; analysts R. &quot;Ray&quot; Wang and Andrew Bartels said in the report.The analysts noted that the market could see hardware vendors like Cisco make major software buys, but said such scenarios do not constitute software vendor consolidation in the traditional sense.Three major factors will staunch the flow of megadeals, they argued.Citing projections showing double-digit growth in global software revenue for 2007 and 2008, Wang and Bartels argued that vendors will not need to grow through large purchases in the immediate future, and will instead choose &quot;organic growth and spot acquisitions&quot; to satisfy shareholders.Second, the credit crunch caused by the subprime mortgage meltdown is making it harder to borrow large sums. And thirdly, there are simply fewer large ISVs to buy, the analysts noted. They identified 18 large independent software vendors that are potential targets and said many of those can be eliminated because of &quot;poor fit with strategy, financial or business questions, high price, or other considerations that stymie acquisitions.&quot;IBM will be the most aggressive with acquisitions and may go after packaged applications, a field it has largely avoided to date, according to the report.&quot;The most likely scenario involves smaller acquisitions of key ISVs building on Websphere. But if IBM makes a move for packaged apps to compete with Oracle, top apps targets could include IBM partners like Infor, IFS, Lawson, or even SAP. Industry-specific targets could include Amdocs, Deltek, and Primavera Systems,&quot; the authors state.Wang said he was comfortable making this prediction despite IBM&#39;s insistence that it has no designs on packaged applications. &quot;Last year, they spent the whole year saying they were never going to buy a BI vendor,&quot; Wang said, referring to IBM&#39;s deal to buy Cognos.As for Oracle, it will buy companies tied to middleware and vertical business applications, according Forrester. &quot;We expect Oracle to make midsize bets in key verticals like project base solutions (e.g., Computer Methods International or CMiC, Manhattan CenterStone), financial services (e.g., Temenos), retail (e.g., Escalate), and telecom, utilities, and public services (e.g., SunGard).SAP will make small purchases to flesh out NetWeaver, according to the analysts. These may include vendors of user interface tooling, master data management software and business process management products, they said, citing SAP&#39;s recent buy of Yasu Technologies, which makes a business rules engine, as evidence. &quot;Additional acquisitions could come from existing partners like AmberPoint SOA Management, F5, Magic Software Enterprises, OpenText, Savvion, and Worksoft,&quot; they added.Among the big four players, Microsoft will be &quot;the least active&quot; in terms of acquisitions, according to Forrester. &quot;Expect the Redmond giant to make selective acquisitions that do not conflict too much with its ecosystem strategy,&quot; they wrote. Possible targets include &quot;middleware solution providers like VisionWare in the customer data integration space, Riversand Technologies in the personal information manager space, and Web 2.0 specialists that enhance its Information Workplace platform.&quot;Software executives offered mixed reactions. Tom Hogan, senior vice president of HP&#39;s software division, said his firm will likely continue to acquire companies, but is focused more on organic growth. Last year HP spent about 70 percent of its roughly $3.5 billion research and development budget on software, according to Hogan.&quot;That&#39;s a lot of internal R&amp;D that should ... generate commercially viable software over the next couple of years,&quot; he said. &quot;If you want to really hit the home run for shareholders, you build it yourself. When we can&#39;t build it because we don&#39;t have the DNA or the time, then we will turn to strategic M&amp;A.&quot;Executives at smaller vendors offered other takes. Informatica, a data integration vendor, is competing with the likes of IBM but enjoying strong growth, reporting this week that its 2007 revenues rose 21 percent to $391 million. CEO Sohaib Abbasi said mergers and acquisitions in the software industry should be examined beyond the size of a given deal.The pace of consolidation is much more aggressive in established categories like business applications, he noted. &quot;At the other extreme is emerging categories such as software as a service, where there is no consolidation to speak of.&quot;Informatica is doing well thanks to the relative newness of its space, he said: &quot;We are in the very early days of the data integration market. Half of our deals are uncontested.&quot;Patrick Durbin, CEO of the portfolio-management-software company Planview, said in a recent interview that his privately held firm, which has 450 customers, has &quot;critical mass&quot; and can survive as an independent.Durbin&#39;s firm partners with various companies, including Microsoft. He couldn&#39;t say for sure what would happen if it or another firm came knocking: &quot;The moment I tell you I&#39;ll never sell is the moment someone&#39;s going to back up a truck with a boatload of money.&quot;
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eBay, PayPal, Microsoft and others -- is increasing. The report gave greater focus to the server side of