While the bell has been tolling noisily for enterprise software for some time, the data has finally become 
as compelling as the criticisms. A nice summary of both is a piece in the current issue of IT Manager’s Journal, where the author points out that enterprise software is doing just fine, thanks very, but binary-installed entperprise software is on a negative power curve to oblivion:
Over the last few weeks I have spoken with a lot of companies in PowerSteering Software’s category — corporate program management. None of them looked happy. But several of them pointed out that Niku has been doing well in the category. I wasn’t surprised to see this AP headline recently: “Niku Slashes 1Q Outlook, Shares Tumble.” Services revenue is holding up well, but licensing revenue has declined due to “stronger than expected seasonality.” Yeah, right.
I talked about this trend with Mike Kinkead, serial software entrepreneur and one of the founders of the Massachusetts Software Council. He recently moderated a strategy session for the council to figure out the way forward, and his conclusion was that the traditional enterprise software business is dying. That doesn’t mean that the software business as a whole is dying, but it has shifted permanently to new revenue models. He asked me: “What big software company came out of the Internet boom? Netscape is dead.” He pointed out that the big winners, like Google and eBay, are users of software, not vendors. We still buy a lot of software, embedded in devices and services, but we don’t buy it as licenses.
The preceding is precisely the point, one reminiscent of a little bit of pseudo-schtick that I saw Tim O’Reilly (I think) do at a conference. He asked everyone in the room who used Linux to put up their hand, and when relatively few people did he asked, “How many of you use eBay, Amazon, or Google?” When everyone’s hand went up he said, “You’re all using Linux”.
It isn’t so much that people aren’t using software, or even new operating systems. They are. It’s just that such things are now buried in services that insulate us from the messy old 1990s business of enterprise software.
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