Software vendors await recovery

The recession may be showing signs of being over in the US, but for many business software vendors the recovery cannot come fast...

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.

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