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Year in review: In the software trenches

The only thing worse than a year in which corporate software spending goes on hiatus is not knowing whether the next year is going to be any better.


Business applications: A market retrenching

The only thing worse than a year in which corporate software spending goes on hiatus is not knowing whether the next year is going to be any better.

Businesses have taken an extended breather on IT spending, making it a tough year on companies that specialize in corporate software, such as SAP, Siebel Systems, PeopleSoft and Oracle.

Once booming software niches, including customer relationship management (CRM) and supply chain management, have fizzled, taking the sizzle out of the stock prices of former Wall Street darlings Siebel and i2 Technologies among others.

The scarcity of business has led already highly competitive software makers to turn to negative campaigning in the battle for sales. Siebel, leader of the CRM market, has been a particularly popular target. Rivals SAP and PeopleSoft say they're eating into Siebel's market share and converting its customers to their camps.

Siebel's prospects even came into question at one point, and rumors began to fly about a possible takeover by Microsoft. While that deal never materialized, it likely rattled the nerves of software companies already on edge about Microsoft's new interest in business applications.

Microsoft, which entered the market in 2001 with the acquisition of Great Plains, upped the ante this year with the acquisition of European software maker Navision and the announcement of the software giant's entree into the CRM market. Potential rivals downplayed Microsoft as a competitive threat.

Oracle, ordinarily an avid Microsoft basher, was too busy with other problems to say much about Microsoft encroaching on the business applications market. In the spring, the company found itself at the center of a political imbroglio over a $95 million contract with the state of California. The fiasco, involving accusations of improper campaign contributions, dissolution of the state's IT department, and the resignation of several agency heads, ended in a cancellation of the deal.

The company found itself in a harsh spotlight once again in August when high-tech manufacturer Agilent Technologies blamed a shortfall in third-quarter sales on problems it encountered installing its new set of Oracle applications. Later in the year, a number of Oracle customers banded together against an Oracle mandate to upgrade to the latest release of its applications by next June or lose the company's support for the older version.

But as unpleasant as the downturn in IT spending has been for software makers, big, established companies like Oracle and SAP are sure to be relishing the fall of once mighty up-and-comers like Ariba and i2 and the swing back to big, established companies as the safe choice for IT departments. They are also salivating over the U.S. government's Office of Homeland Security, aligning their wares and sales efforts in anticipation of an IT spending bonanza by the new federal agency.

The questions that remain on everyone's mind, however, are whether the corporate software market has hit bottom and when chief information officers will begin to loosen their purse strings again. On those issues, the jury is still out.

--Alorie Gilbert

Is CRM all it's cracked up to be?
In the corporate world, those three letters have become the Holy Grail, promising to smooth customer relations and improve the bottom line. If only it were always true.

April 3, 2002

Oracle: Learning humility?
The database maker shows signs that it's learning an important lesson in the business-software market: Make the customer happy.

April 11, 2002

California agrees to cancel Oracle contract
State officials put an end to a hotly disputed $95 million software contract with the software company and its partner, Logicon.

May 7, 2002

Oracle criticism: A familiar refrain
A contract fiasco with California draws a firestorm of criticism, but some of the more controversial aspects are all too familiar to technology officials in other government agencies.

May 28, 2002

Tech companies chase homeland security
Whether out of heartfelt patriotism or the desire to tap into a $38 billion spending stream, many IT companies are now going to great lengths to attract government business.

July 12, 2002

Buggy software still takes a toll
Imagine buying an energy-saving dishwasher and seeing your monthly electricity bill double, and you'll understand how a growing roster of executives feel about their decision to install expensive business software.

August 27, 2002

Survey: Linux growing; CRM in doubt
Integrating applications and buying security software are in, and CRM software and new hardware purchases are out, according to a survey of chief information officers.

September 4, 2002

Rivals vie for Siebel's customer spoils
And there's nothing pretty about it. Anemic spending on information technology forces the campaigning for new customers to turn negative.

September 27, 2002

Clash of the titans
Microsoft, the world's largest software company, ventures into unfamiliar terrain dominated by such industry giants as Oracle, SAP, Siebel Systems and PeopleSoft.

October 14, 2002

Oracle, Siebel execs see tough 2003
Software executives from the two companies say they don't expect businesses to be much more eager to buy software next year.

October 29, 2002

Oracle's "de-support" deadline draws ire
As thousands gather for the annual OracleWorld annual confab, an impending ultimatum over a key software upgrade has some information technology managers fuming.

November 11, 2002


• Lawson settles software lawsuit
• PeopleSoft, peers sing earnings blues
• Siebel: No time for apologies
• Competitors eye Microsoft's CRM moves
• Court halts Siebel ads that knock SAP
• SAP-Siebel rivalry heats up
• Microsoft reveals business software plans
• Microsoft seals deal for Danish company
• Microsoft jumps into CRM market
• SAP's U.S. plan may mean Microsoft war
• Analysts consider Microsoft-Siebel pact
• Let's get ready to rumble
• Siebel replaces top sales exec
• Executive shake-up hits i2 Technologies
• SAP details Web services plans
• Pay-tracking tools a sign of the times
• PeopleSoft hopes to end numbers flap