Editor's Note: An Industry In Transition - InformationWeek

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Software // Enterprise Applications
03:34 PM
Stephanie Stahl
Stephanie Stahl

Editor's Note: An Industry In Transition

For many years, the software industry has been in transition--from monolithic apps to client-server apps to Webified apps. Then, throw in some new programming tools, portal action, and software-as-a-service strategies. I think it's fair to say the software biz will always be in transition, with vendors trying new ways to meet user demands for sophisticated capabilities, ease of use, and the ability to transform a business process. There's no other choice in this highly competitive industry. It's worth noting that, according to Morgan Stanley Dean Witter, there are about 750 public software companies, but only 12 of them reported more than $1 billion in revenue in the last year or so. There's been a significant amount of consolidation in the industry, prompting some pundits to predict that as many as half of the companies in business at the start of the decade will be gone in a couple years. We can only hope that many exciting, innovative, new companies will emerge.

With that in mind, we're paying close attention to the changing strategies that software vendors must adopt to remain relevant. Take SAP, for example. It's moving toward a rich mix of applications, Web services, and business processes. The goal: a decentralized, plug-and-play architecture that supports specific processes. Other enterprise app vendors are right alongside them (see story, "Process Oriented").

Look at the search-tools business. Last week, I had a conversation with Anthony Bettencourt, president of Verity, who says it's moving away from simple information retrieval to "intellectual-capital management." The goal is to make knowledge workers more productive by letting them get at richer kinds of data that supports key business processes (see story, "Search On").

Last week, we began a series that looks at growing movement by supply-chain players away from tactical issues toward a global-supply management strategy (see this week's "Going Beyond E-Procurement," p. 44, and "Supply Siders," p. 18, Jan. 13). Stay tuned for more.

Stephanie Stahl,
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