The two major ERP vendors (which I call SAPORACLE) are facing a more rapid decline in licensing revenues due to IT cutbacks. In fact, they are essentially facing a “Reset” – more so than a recession. CIO’s are very tired with ERP vendors raising maintenance and throwing acquired software products at them left and right. Once a software vendor decides on pursuing a “financial engineering” acquisition strategy – it is never good for the end customer. It improves earnings for the vendor. Any large company has challenges when it comes to innovation – even if R&D monies are allocated to development teams. Politics alone can kill innovation inside a large vendor.
CIO’s are even more disgusted with what I call the “Suites are Sour” paradigm promoted by the ERP vendors. They want to solve business problems, not spend millions on integrating suites of modules. Once maintenance fees hit a high enough level and innovation is absent – it creates a positive environment for a “disruptive” offering. We have seen this happen time and time again in the hi-tech market.