What is going on in the enterprise software space?

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I have not witnessed anything that has created as much buzz in the computing community as the goings on between Oracle and Hewlett-Packard over the past few weeks.  Well, perhaps Steve Jobs' health and discussion about succession at Apple, but that was contained to Apple.  What is intriguing is that this round of ‘musical chairs’ involves not only HP, but also Oracle, because Ray Lane used to be at Oracle, and SAP, because of course Leo Apotheker used to be CEO at SAP.  Initially I wrote ‘software community’ instead of ‘computing community’ in my opening sentence.  Microsoft first forced the split between hardware and software with the development of DOS, thereby commoditizing the hardware.  It sure feels that we may be on the cusp on another big shift in emphasis to a combination of hardware and applications that will commoditize the operating system. I haven’t yet had time to catch up on the latest Twitter comments, but I had to laugh out loud at a tweet by Dennis Howlett musing over the Oracle MarCom team’s efforts to reign in the barbs that Larry Ellison will throw at SAP and HP.  There is some really good comment (and speculation) by Dennis Howlett, Tom Wailgum, and Josh Greenbaum on what the appointment by HP of both Apotheker and Lane could mean.  I agree with Dennis Howlett that Leo Apotheker taking the CEO job at HP is worth a comment on its own, but the combined appointment of Ray Lane by HP makes this newsworthy.  But I am confused because both Apotheker and Lane are software guys who have been appointed by a hardware company (HP), while a hardware guy, Mark Hurd, has gone to Oracle, which is a software company despite its recent purchase of Sun.  Or maybe that should be Oracle was a software company until its recent purchase of Sun and Larry Ellison’s keynotes at Oracle World?  Now if Larry Ellison had hired Leo Apotheker instead of Mark Hurd, that would have been interesting. There is also an interesting comment by Ray Lane on what this could mean strategically.  Ray muses that HP needs to up their game in terms of a combined software, hardware, and services play, extending beyond Oracle's ‘appliance’ play of software and hardware.   In this vein there is also much to comment about HP buying SAP, while Dennis Howlett flips this around to speculate about SAP buying HP.  Who knows.  All I know is that there has been little that has caused as much stir in the blogosphere and twitter universe concerning the enterprise application market.  I am much more comfortable commenting on the space than reporting on the space, but this is too big.  I have to report this. There is something going on and only time will tell how it will play out.  Will we see what appears to be Ellison’s strategy of combining hardware and software prove to be successful?  What does this mean for the likes of Microsoft and SAP?  Anyone heard the rumor that Microsoft is getting out of the enterprise application space, that is Dynamics?  Microsoft’s moment was when it separated the operating system from the hardware, thereby commoditizing the hardware and dominating the desktop, but from an operating system perspective.  Yes, Microsoft has gone on to dominate the desktop application space with Office and Internet Explorer, but it started with the operating system. Are we really seeing the moment when the operating system becomes commoditized by the combination of hardware and business applications?  Only time will tell.

Discussions

Andy
- 10月 03, 2010 at 12:18午後
After buying up as many software companies as it could, Oracle bought Sun to simply change the playing field and CIO conversation. It is something they have excelled at since they got rolling. Ray Lane knows this all to well and he is the natural fit to help HP become a full services company from NIC card to nose in front of the keyboard.

It will be an interesting race to watch. If we are in fact seeing a return to monolithic architectures from a handful of vendors, it will be interesting to watch what IBM, CA and Microsoft do.
Trevor Miles
- 10月 03, 2010 at 8:26午後
Hi Andy

I wonder who HP will buy from an Enterprise App perspective? They don't have anything at the moment, as far as I am aware. There are a whole bunch of mid-market and mid-tier ERP vendors out there, even some SaaS ERP vendors, but no-one that has the dominance of SAP and Oracle in the >$1B market. The next largest is perhaps Infor, followed by Microsoft, but they both have multiple apps, of which only BaaN (or whatever Infor is calling it these days), and Axapta have a real chance of making it to the $1B level. Do you see them going into this space? Do you think they may be interested in Microsoft Dynamics?

IBM is an interesting play. Despite professing to sell technology rather than application, they have a big application portfolio, including of course Cognos, and ILOG. But to the best of my knowledge IBM doesn't have an ERP system. With their push into the Linux/Java/Opes source world I can't see IBM being interested in Microspoft Dynamics.

CA only has lower tier ERP's and accounting packages. I really see Ellison's play at the top end of the market, though of course every SMB would love an appliance that took away the need for IT staff.

Which leaves Microsoft. It would be a huge shift for Microsoft to acquire a hardware company. While I can see the conundrum they are in, I can just imagine the huge uproar from government regulators let alone hw partners. The question is what they will do with Dynamics? Ballmer doesn't strike me as someone who understands the enterprise app space. I think he is a lot more focused on Apple and Google than SAP or Oracle.

If these comments and opinions lat more than 36 months I will probably be sorely embarrassed by them. If we are to believe Nicholas Carr perhaps 'computing' will have become a utility like electricity or TV, renderign the whole discussion about hw and sw moot.
Jorge Angel
- 10月 04, 2010 at 8:37午前
Very Interesting Trevor, let us now wait and see the next Move!!
Andy
- 10月 04, 2010 at 9:09午前
Trevor.

All very true. While working in CRM dev at Oracle, we watched SFDC build out the entry level offer, then mid-market and finally, we started seeing them in select F500 accounts. The clever Saas players are in a great position. Oracle's apps are tied to legacy versions of plsql, java stacks, 2 and 3 tier architectures. the likes of yourselves, Netsuite and SFDC are in for some interesting M and A talks over the next 24 months (IMHO):)

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