ZDNET CHINA August 18 (text: Martin Lamonica / Translation: Jasmine) The situation in the enterprise software market is obvious, that is, or merged, or be merged by others.
Experts pointed out that with the company's efforts to expand the product range, the enterprise software industry will explode, this pressure may prompt, large software vendors considering the problem of mergers.
When disclosed earlier this month was considering acquisition of Novell, SUN's two handed Jonanonson brought a sensation to the industry. Although many analysts believe that Sun-Novell merge is impossible, this indicates that high-tech manufacturers are planning a big action. Licensing in two consecutive quarters fell, many officials left and restructuring have made people suspected that BEA's long-term capacity for independent software vendors. In fact, during the Oracle Anti-Monopoly Course, Oracle has revealed that BEA is a possible acquisition goal. By publishing a testic merger negotiation, SAP companies and Microsoft cast another heavy bomb in the industry. Broadview's management supervisor Paul said that if you can grow, your company will grow by merger. The most hard work in the world is software sales staff, because there are too many companies in the market to compete for a limited number of budgets.
Smaller companies will continue to become a "dish Chinese meal" of all crocodiles. In order to enrich the utility calculation of the product line, HP, IBM, Sun and Veritas acquired several small companies. According to market observed, due to the chances of listing of stock financing, many new enterprises need to consider "exiting the strategy", establish close cooperative relationships with large enterprises or merge with them.
Many small companies have been doing so, they have established a closely alliance with the industry giants through technical integration and cooperation. Analysts pointed out that the same, large business customers are chosen to do business with fewer suppliers and running applications on less platforms. Risk Investment Manufacturers Highland Capital Management Partner Bowo said that new technology solutions are less and less, because the major issues that need to be solved are less and less. He suggested that the new company should provide technology to industry-level industries, such as medical and transportation. Enterprises usually prefer to rely on "relying on" suppliers to provide technology that is used in data centers.
Some experts predict that these situations will lead to acceleration of mergers. If more companies have eliminated more companies, it may change the composition of the industry. Wolf, president of Martin Wolf Securities, said that we believe that most companies you know in the next two years will not exist, which will become part of other companies.
The change in procurement model will help promote this trend. In recent years, companies have reduced the number of suppliers of deal, purchasing more technologies to fewer suppliers, which has enabled large companies to make up for their defects in product lines through acquisitions. For example, since 2001, IBM's software group has conducted 17 acquisitions.
Although high-tech investment has increased overall growth, analysts believe that the software industry has not resumed rapid growth. Many local customers do not start large-scale projects, but to better utilize their systems and data now. Bob said that many companies are forced to expand their customers by increasing the hope of new customers to expand their business.
Analysts pointed out that the expected merger wave reflects the maturity of the software industry. Unlike the market with thousands of high-speed growth in the market, the enterprise software market is more like a more mature industry such as pharmaceuticals. During the trial of the Oracle anti-monopoly, Oracle's head of the Oracle, said that the changing changes in the market have prompted Oracle companies to acquire smaller competitors. Oracle has clearly expressing, even if you can't acquire Renke, it will also spend billions of dollars to acquire other companies. Ellison said in June, we hope to be a survivor, but we feel that the only way out of survival and prosperity is acquisition.
Other signs of mature software market are also very obvious. Microsoft, which was once considered a high-speed growth company, and it was also decided to issue normal dividends to shareholders last month. Getting new software license income is more difficult. In the second quarter of this year, several large software vendors, including BMC, Siebel, Veritas, said that due to weak enterprises, they have not achieved expected results. Some market observes pointed out that even software investment has grown, large-brand software vendors' dependence on maintenance and consulting business is growing. Wolf said that conversion to low profit margin revenue reduces the value of software companies, making them finally incorporating with other software companies. He said that because manufacturers have to compete with low-cost offshore outsourcing service providers, professional service business combined pressure is greater.
Analysts pointed out that there is a large number of companies like safety and other markets. In addition, the merger process may last for several years. In the past, major technical breakthroughs such as Web or client / server patterns provide opportunities for new creations. Many people pointed out that there are more software fields, including business intelligence, management software, and agreed process management today, including business intelligence, management software, and mergers.
Some observers pointed out that medium-sdate companies may become a "dish Chinese meal" of the software giant. According to the analyst of the Precursor Group, once it became a medium-sized company, the importance of the best product is not as important as the width, depth, and sales channels. Although BEA has no action in the acquisition, other medium-sized companies have been invested in smaller companies to get enough markets to avoid greater companies. For example, Novell acquired SUSE Linux and open source desktop software vendor last year, which enables Novell to sell services for open source software.
However, large-scale acquisitions may face some obstacles. Implementing the mergers between software companies, especially those with a large number of customers. Red Hat has taken over the acquisition of SUSE Linux, but eventually gave up, part of the reason is to foresee the difficulty of integrating two companies. In addition, government anti-monopoly agencies will also review the mergers between large companies, such as the US Department of Justice attempt to obstruct Oracle's acquisition of Renke.
Analysts pointed out that the increase in corporate software providers will benefit customers depending on the specific market sector. In the enterprise application market, since the manufacturer is very small, the merger will make companies feel very worried. At the time of the Anti-Monopoly Course, the Ministry of Justice said that Renke's customers worried that Oracle will increase product prices and no longer update the Software of Renke. J. D. Edwards' customers also complain that their concern is not as good as before.
