I'll briefly try to summarise what the big four are promising. This will spare you having to try to comprehend the American designed and built TV ad campaigns at least two of them are about to start inflicting on us.
First, let me set the scene. The big four are Microsoft (sales of about $US23 billion in 2000), IBM (software sales of about $US12.7 billion last year), Oracle (sales last year of $US10.1 billion) and Computer Associates (sales of $US6.1 billion last year). Together, their four businesses roughly equal New Zealand's GDP. (Memo from Trevor Mallard to Paul Swain: Hey, Pauly, let's turn Aotearoa New Zealand into a software company! I'll be marketing vice-pres and you can be CEO. We'll let Helen be pres. Swain to Mallard: Thanks, Trev, I'm already working on it. And please, don't call me Pauly.)
And well he might be working on it. With the exception of Computer Associates, the software market leaders are looking forward to better growth than our GDP. CA's situation is complicated by licensing model changes, affecting when it writes the proceeds of long-running deals into its books. Microsoft, though, looks unstoppable, with the likelihood of the company being broken up apparently receding; Oracle claims to be reaping huge cost savings from e-business, lifting profits enormously in its last 12 months; and IBM, eyeing the fat margins each of those two enjoys (about 40% apiece), is intent on selling more software, the most profitable part of its business.
What, then, do they have in store? With newly acquired skills at analysing marketing messages (gained through having endured a two-day presentation course), I'll give you my interpretation.
Microsoft, far and away the slickest practitioner of this sort of thing, is pinning all on .Net. What dat? "It's absolutely pivotal in terms of the execution of our strategy", that's what, says New Zealand boss Geoff Lawrie. Yes, but what is it? "It's absolutely pivotal … " Cut to ridiculous video of hapless American bumbling his way through the world, repeatedly being saved by someone at the distant end of his extraordinarily capable mobile communications device … XML, we're told, is a key ingredient; also, "elements of .Net are based around broadband connectivity to mobile devices", Lawrie intones. Further elaboration on that point is unforthcoming.
Firmer evidence of the reality of .Net will apparently be seen in the release of Visual Studio.Net, a development tool, in the second half of the year. And while there's little tangible to be seen of .Net yet, Microsoft's pouring enough money ($US100 million) into development of the framework that it has to be taken seriously. In the meantime, the company is sure it will continue to sell lots of PC operating system licences and an increasing amount of heavy-duty software (its SQL Server database, for example) to big organisations.
IBM's message is a little less deftly delivered than Microsoft's but, after having it repeated at one for a day-and-a-half, it penetrates. The first point is that IBM's software division is neither an operating system company nor an applications company; it sells middleware. Ten billion dollars - US - of the software it sold last year was middleware, says Big Blue. CA was its nearest rival, followed by Oracle and Microsoft.
The next thing IBM wants you to remember is that it has four software brands: systems management tool Tivoli, collaboration tool Lotus, the DB2 database and e-business suite WebSphere. Got that? Right, now you're invited to use them -- together, or in combination with other vendors' products -- to build your e-business.
Subtlety is not the long suit of Oracle boss Larry Ellison. Firstly, just to correct a misapprehension you might have about database rival IBM's software business -- it is not growing, but is shrinking, Ellison asserts. On the other hand, IBM's services business is expanding, he goes on, which he believes only highlights the inadequacy of its software. Ellison's message at the company's AppsWorld conferences in the US and France this month is that customers should buy Oracle's software and modify their organisations around it, rather than attempt to customise applications to suit their processes. You want a reference site for this revolutionary way of thinking? Well, it worked for Oracle, Ellison says.
And so to CA. Not having witnessed CA's spiel delivered last week in Sydney (nor Oracle's, for that matter), I'm having to interpret it from a distance. Brutal honesty would seem to characterise part of it: the company's going to run losses for a year or two as it straightens out its accounting processes. Then there's an elaborate e-business scheme to rival anything IBM has come out with; a new logo and the catch-cry "the software that manages e-business". I hate to suggest it but it smacks a little of desperation. With $US100 million being poured into the effort, though, I'm sure to be proved wrong.