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Enterprise software: The last dot-com victim?

Charles Cooper, CNET.com CNET News

Published: 04 Mar 2003 15:02 GMT

True story.

As part of an agreement to resell customer relationship management applications made by Siebel Systems, J.D. Edwards regularly shared the names of its prospective sales leads. But all the while, Siebel was secretly sending out its own salesmen to pitch the same prospects. A retelling of the tale earlier this week by J.D. Edwards chief executive Bob Dutkowsky elicited knowing laughter from a Silicon Valley audience acutely familiar with the art of the double cross.

For the record, Siebel maintains that a falloff in customer satisfaction caused the unravelling of a bad relationship. Whatever the actual truth, the tale also bore witness to another reality about the enterprise software business: these remain cutthroat times and whenever there's spare change up for grabs, alliances turn out not to be worth the paper they are written on.

By any measure, the enterprise software business has had a rough time of it. The optimists originally pegged 2002 as a year of slow, modest improvement, and predicted further improvement in 2003. They were, to put it kindly, full of it. Now they say things will pick up once the Iraq crisis gets resolved in the next 90 days.

That's the least of their problems. Enterprise software makers may want to believe business will return to normal when the geopolitical storm clouds clear but they're only kidding themselves. The truth is that neglected customers are undergoing a sea change in reaction to their shoddy treatment.

It took long enough.

During the pre-Y2K buildup, companies overlooked buggy software, shabby support and the dismissive arrogance of suppliers because the overriding objective was to buy, buy, buy. I should add this was a buying spree caused in no small part by a scare campaign orchestrated by salesmen with a self-interest in stoking as much panic as possible.

But in this post-frenzy era, chief financial officers are regularly holding folks accountable on a project-by-project basis. That means IT managers no longer have the gumption -- let alone free rein -- to take big chances spending a fortune on iffy software implementations.