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TWST: Please give us an overview of your coverage.
Ms. Haus: In terms of my coverage specifically, I have historically focused on
the CRM part of the application market, but I would define the overall
application market as things that run on desktops that help people do their jobs
more efficiently. There are a lot of different subsegments of that, but the
three major ones have historically been CRM (customer relationship management),
that are applications which are externally facing and are primarily interactions
with customers, ERP (enterprise resource planning), which tends to be the back-
end systems such as your financials and HR, as well as systems that run
internally, and supply chain management (the SCM space), which tends to be
things that are externally facing, but interact with your partners and
suppliers. So that's historically how the enterprise market has really been
divvied up. However, more recently, the division between those three segments
has really been blurring, and it's becoming more challenging to assign companies
to one of those three segments. TWST: Does that make sense?
Ms. Haus: I think it absolutely makes sense. One of the other things that we
have seen over the last few years is that software buyers have started to
rationalize the number of vendors that they purchase from, simply because the
integration cost of buying multiple disparate systems and gluing them all
together is very costly and time consuming. In particular, you saw the bigger
vendors, specifically the ERP vendors, a couple of years ago, come out with this
great message, which was, "Buy the entire suite from us." You saw Oracle (ORCL)
do this, you saw PeopleSoft do this, which is obviously now part of Oracle, and
you saw SAP (SAP) do this. It was a response to how customers wanted to buy
software, which is by subscribing to the one neck to choke philosophy. Rather
than source from 25 different software vendors, they really only want to buy
from three or four. So the vendors all tried to put as many things on their
price list as possible so that they would get a bigger share of the IT dollars
available.
Tickers included in this excerpt: CHRD, CRM, LPSN, ORCL, RNOW, SAP, ULTI
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
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