In the business software sector, the big are going to get bigger. That's the view of Bruce Richardson, chief research officer at AMR Research, Inc. He reports on a recent survey of 236 IT and line-of-business executives, in which 72 percent revealed plans to increase spending and only 3 percent were anticipating cuts. (Believe it or not, 28 percent of respondents were implementing enterprise resource planning systems for the first time.) Turning to 2006, Richardson identifies five broad themes related to the software market. One is continued vendor consolidation-and fewer choices for buyers. "Vendors are being acquired faster than new firms are being funded," says Richardson, citing mega-deals such as the Oracle acquisition of Siebel as well as smaller transactions like IBM's purchases of Micromuse and Bowstreet. And make room for the biggest gorilla of all: Microsoft Office is tackling "enterprise" applications, initially through its Dynamics CRM 3.0 and cooperative venture with SAP AG on Project Mendocino. (The latter will tie SAP functionality to Microsoft Office applications.) Redmond, says Richardson, aims to "lock up the business desktop."
Other predictions from Richardson: Look for Google to take on eBay or the big retail chains as a source of consumer electronics and other big-ticket purchases. Expect a strong year for collaboration applications between trading partners, such as E2open's effort to build electronic hubs for high-tech companies. And while you'll be hearing lots more about service-oriented architectures, "we don't see the need to declare 2006 as The Year of SOA." The technology, a means of integrating disparate services and applications, is still young, except for early adopters and workshop hawkers.