The Internet is changing the face of the software industry and whether 'old world' players such as Oracle and Sybase can survive will depend on how well they transition to the new model.
According to senior analysts with investment bank, Bancboston Robertson Stephens, at its “Investing in Innovations” conference in San Francisco this week, the industry is on the cusp of a business to business ecommerce wave, following a previous focus on the business to consumer ecommerce market.
As a result, suppliers will need to rethink their strategies in five areas, which comprise application servers, content management, analytical systems, applications management and ecommerce portals.
Analysts believe that the applications server market will be worth $2 billion in a few years and will concentrate on making Web applications that pull information from backend systems secure and on keeping intruders out. Key players here include Bea Systems, Oracle and the Sun/Netscape Alliance.
Marshall Senk, Bancboston’s Internet and ebusiness software analyst, said that analytical systems, on the other hand, try to perform the same functions as data warehouses, but do not need fat clients or hours of training. They are more intuitive to users and know how to integrate information from a variety of sources. Key vendors include Oracle and Brio.
He continued that applications management systems ensure that packages and databases keep running and deal with failover situations. They also ensure that users get the latest and correct information and need to be available, fixable and perform well.
Also useful are up and coming suppliers such as Vignette, Broadvision and Allaire, that can help companies build storefronts on their Web sites.
But the Bancboston analysts also predicted that applications service providers (ASPs) or companies that host applications for customers over the Internet, will become popular over the next six months.
Eric Upin, the compamy’s ebusiness applications analyst, claimed the "old guard will go away" as the industry welcomes "new players, new architectures and new landscapes. Most of the beneficiaries will be small companies".
He believes that software from ASPs will cost users less per seat than moving from mainframes to client/server in the early 1990s, and added: "The business to business space will be as big as business to consumer. Software has to be built today, but in the future, companies will rent software. We're bullish about this space after a tough winter this year."
Upin attested that new business to business ecommerce players differed from traditional software companies because they provided vertical industry expertise rather than a one size fits all strategy.
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