The recession may be showing signs of being over in the US, but for
many business software vendors the recovery cannot come fast
enough. Many reported lower than expected preliminary financial
results for the first quarter of this year.
Enterprise software vendor BroadVision announced that it expected
quarterly revenue of $29m (£20m) to $32m (£22m), which was lower
than the $40.38m (£28m) expected by analysts.
Customer resource management software vendor E.piphany expected
revenue of $22m (£16m) and a net loss for the quarter, compared
with an analyst's revenue projection of $25.25m (£17.8m).
i2 Technologies, Commerce One and PeopleSoft are all expecting to
report lower than average quarterly figures later this month.
Vendors cited the continuing economic downturn as the reason, with
customers cutting their IT spending as a result.
The shakeout from the Internet boom last year has also affected
business software sales. Analysts believe that customers are still
confused about the applications available and often unsure what to
buy. Many want to see immediate results from their IT software.
The hard times for software vendors are expected to continue at
least until 2003. According to a survey by Forrester Research,
interest in purchasing customer relationship management packages
was seen among only 35% of 874 global respondents. Supply chain
management interest among potential customers was even worse, with
61% saying they will not buy this year.
Forrester's research also indicated that since the events of 11
September, many companies were spending what IT budgets they had to
bolster infrastructure security.