By John Pallatto  |  Posted 2005-12-14 Print this article Print

.coms Dissenting Voice"> The Oracle-PeopleSoft Inc. buyout was "a watershed event" because it signaled an even greater concentration of market share in the industry, Roux said, taking place at a time when software companies are competing for a smaller portion of IT budget dollars. Four years ago corporate IT departments devoted 65 percent of their budgets to maintenance of existing systems and 35 percent to acquiring new technology, he said.
Today maintenance spending has increased to 75 percent and new acquisitions are down to 25 percent. This means it will be harder than ever for small companies to win a share of this business, he said.
A prominent dissenter to this view Wednesday was CEO Marc Benioff, who states his own view whenever possible that the likes of Microsoft, Oracle and SAP are going to see their growth and profits eroded by vigorous and nimble on-demand application service providers like his own hosted CRM (customer relationship management) business. Benioff includes Google Inc., eBay Inc. and Yahoo Inc. in the category of on-demand service providers that pose critical competitive challenges to the established enterprise software companies. Benioffs mantra is that "software is dead" and that both business IT managers and consumers will increasingly turn to software applications running on the Internet to rather than installing software packages on desktop computers or servers. Furthermore, applications that are considered the unassailable province of Microsoft, such as spreadsheets, e-mail and even word processing, will increasingly be replaced by services running on the Web, he said at the conference. New companies such as Zimbra Inc., which offers on on-demand, open-source enterprise messaging and collaboration systems, or, an online collaborative document management service, offer new challenges to the Microsoft Office package, Benioff said. Click here to read more about why Microsoft plans to move aggressively into the field of on-demand software services. It is only a matter of time, Benioff said, before an even great range of ERP (enterprise resource planning) applications are offered on the Internet. Moves by Microsoft, Oracle and SAP to offer hosted versions of some of their applications will be too little, too late, he said, because history has already shown that hybrid strategies dont work, since these companies have too much money and effort committed to supporting their packaged software businesses. Check out eWEEK.coms for the latest news, revie

John Pallatto John Pallatto is's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.

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