Customers Rule

 
 
By Lisa Vaas  |  Posted 2004-06-04 Email Print this article Print
 
 
 
 
 
 
 


?"> In contrast, the DOJ will argue that, given a successful Oracle-PeopleSoft merger, the market for what its calling "high-function" software will shrink from three players down to two—SAP being the third leg in the stool. In the SIIAs view of the market, customers rule. They "control virtually all of the information" about which software price produces ROI (return on investment), what sellers theyre bargaining with, what features they really need, and the importance of performance and architectural metrics. These savvy customers call the shots to get the best deals they can, meaning that price discrimination and coordination is "difficult, if not impossible, and is a critical weakness of the DOJ analysis," the report states.
Other factors being ignored by the DOJ, according to the SIIA, include systems integrators that have a vested interest in keeping software costs low so that their contract prices can stay competitive.
The SIIA also cites outsourcing as posing a competitive challenge to packaged software vendors, as players such as Automatic Data Processing Inc., FMR Corp.s Fidelity Investments, Hewitt Associates LLCs eCyborg and Ceridian Corp. trounce the likes of Oracle in bidding to provide HRM via services suites. The DOJ is also underestimating Microsofts current and future weight in the market, according to the SIIA. The company in recent years has purchased enterprise applications companies Great Plains and Navision and has pledged that it will spend $10 billion on enterprise applications over the next five years.
Microsoft also has large HRM and FMS customers, including National Truck Leasing System, a $4 billion company, and Sunoco Inc.s Sunoco Products, a $2.6 billion company. The SIIA is also unhappy with the terminology employed by the DOJ. The Justice Department has been using terms such as "enterprise customer" without fully defining what such a thing might be. The agency has also been referring to "high-function" software—metrics of which the SIIA is "unaware," according to the report. PeopleSoft is not a member of the SIIA. The SIIAs report goes to pains to stress the nonpartisan nature of its report by averring that it has in the past advocated antitrust enforcement even when such advocacy would negatively impact members. But the report fails to detail such cases, and calls on the subject had not been returned by the time this story went to press. Check out eWEEK.coms Database Center at http://database.eweek.com for the latest database news, reviews and analysis.

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Lisa Vaas is News Editor/Operations for eWEEK.com and also serves as editor of the Database topic center. Since 1995, she has also been a Webcast news show anchorperson and a reporter covering the IT industry. She has focused on customer relationship management technology, IT salaries and careers, effects of the H1-B visa on the technology workforce, wireless technology, security, and, most recently, databases and the technologies that touch upon them. Her articles have appeared in eWEEK's print edition, on eWEEK.com, and in the startup IT magazine PC Connection. Prior to becoming a journalist, Vaas experienced an array of eye-opening careers, including driving a cab in Boston, photographing cranky babies in shopping malls, selling cameras, typography and computer training. She stopped a hair short of finishing an M.A. in English at the University of Massachusetts in Boston. She earned a B.S. in Communications from Emerson College. She runs two open-mic reading series in Boston and currently keeps bees in her home in Mashpee, Mass.
 
 
 
 
 
 
 

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