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 / Summer 2006 / Issue 43(originally published by Booz & Company)


The Coming Enterprise Software Shakeup

Pricing concerns will drive more cooperation among software buyers. CIO consortiums have been tried in the past, but they often failed; if a company could cut a pretty good deal with a software provider on its own, there was little justification to help a rival get similarly advantageous terms. But the prospect of higher prices changes the equation enough that customers of enterprise software will increasingly band together and demand both better deals for their industry and customized add-ons to large suites that meet the specific requirements of their sector.

Software purchasers may indeed pay a price for consolidation. But in the end, consolidation could cost the large enterprise software suppliers the most. For a short-term gain in revenue, they may end up having to adjust to a new software landscape that emphasizes customer flexibility; more efficient delivery mechanisms; open standards; the rise of smaller, niche data-centric applications; and greater simplicity. Software purchasers who understand this and take advantage of the opportunity to leverage changing industry dynamics will have the most to gain.

Author Profiles:

Mitch Rosenbleeth ([email protected]) is a vice president with Booz Allen Hamilton based in Dallas. He focuses on technology strategies for companies in the consumer products and retail industries.
Corrie DeCamp ([email protected]) is a senior associate with Booz Allen Hamilton in Dallas. Ms. DeCamp specializes in information technology for consumer products and retail companies.
Stephen Chen ([email protected]) is a senior associate with Booz Allen Hamilton based in Dallas. Specializing in information technology, Mr. Chen works with companies in the consumer products, automotive, and financial-services industries.
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