"I think there is some weakness in the market. But I wouldnt overstate it," said Donovan Gow, vice president of equity research at American Technology Research Inc., in Greenwich, Conn. "Siebel and PeopleSoft are two of the biggest misses, and that is mostly explained by SAPs strong results," Gow said. Its an indication there has been some shift of market share from PeopleSoft and Siebel to SAP, he said. PeopleSofts situation could improve if Oracle loses the U.S. District Court antitrust suit that seeks to bar Oracle from acquiring PeopleSoft, he noted. Click here to read about the closing arguments in the Oracle antitrust trial in detail.This raises a question about why there appears to be some persistent softness in the enterprise applications software market. Gow said it is clear that enterprise applications software buyers are being conservative in their purchasing and budgeting, especially for applications such as CRM (customer relationship management), supply chain management, and human relationship management software. "They are just buying what they need for the short term," Gow said, rather than making large bulk license purchases for anticipated needs that in past years ended up as shelfware. "They just arent feeling a lot of urgency to buy these days," Gow said. They are taking their time about making buying decisions and they are prolonging the sales cycle. "They know they are in the drivers seat as far as price concessions are concerned," he said. "There are a lot of hungry vendors out there who are ready to discount heavily." But so far, there has been some modest improvement in overall demand, and Gow expects this trend to continue for the rest of this year. "There are not many areas that will see explosive growth," he said. Data center automation, Linux and security are among the few sectors that are experiencing strong growth, he noted. Next Page: Prospects for slow, steady growth.
But these were two of the more prominent cases, Dow said. Other companies that missed their second-quarter projections included E.piphany Inc., Informatica, Inc., Kana Inc., Secure Computing Corp., Sybase Inc., Veritas Software Corp. and WebMethods Inc., according to Gow.