XP set to knock out software heavyweights

Microsoft's new operating system presents a hefty threat to the enterprise software elite

Microsoft's new operating system presents a hefty threat to the enterprise software elite

The notion that big is beautiful might have worked once in the enterprise software market, but the arrival of Windows XP now means that smaller, younger, smarter IT suppliers have the opportunity of knocking the established giants to the ground.

It's a sad irony that the more successful an organisation becomes, the less nimble it is. However, the choice of software within large companies can reveal the heart of their problems. It is a fact that companies running enterprise applications from the likes of SAP, PeopleSoft and Oracle often find they are simply unable to respond to changes in the market as quickly as mid-market organisations.

Rolling out a new version of a full-blown corporate system is a major operation. In contrast, organisations running Windows throughout their enterprise can select whatever is the most suitable software for each business function - building their systems from different best-of-breed Windows-based applications.

Windows is the most supported IT platform in the world, with a huge army of suppliers developing new software. All this competition results in both constant innovation and reasonable pricing. Companies are able to upgrade applications as and when they see fit. With a single platform across their desktop and server systems, the ongoing cost of running and supporting their IT systems is proportionately much smaller than that of companies with a mix of desktop and server systems.

In recent times, the general consensus within larger organisations has been that Windows systems just have not been able to scale up to the sort of size needed to support their corporate applications. Then there is the view that Windows is notoriously unstable. Organisations have rightly been cautious about trusting their mission-critical systems to an operating system that has become the butt of so many jokes. But times have moved on and so has Windows. Windows NT and 2000 have gradually been finding their way onto the large corporate servers.

Now, with the release of Windows XP - the most stable and scalable version of a Microsoft operating system yet - the option to take the best-of-breed route for enterprise-scale applications is a far more attractive proposition.

There is still a huge psychological barrier that needs to be overcome. Some people just don't like Bill Gates and his company.

To date, people have not taken Microsoft-based products seriously in the enterprise software arena. Yet increasingly businesses at the top end of the middle-market tier, are showing the way for larger players to make substantial savings by shunning the traditional tier-one suppliers in favour of more competitive Windows-based offerings.

Customers are finding that it is possible for Windows systems to scale up and that they will run as happily on a powerful chain of multiple servers as on a single desktop. And the cost benefits are considerable. It is not uncommon for an organisation to reduce its spending on software licences by a half to two-thirds. Costs relating to implementations, add-ons and upgrades can often be cut by a factor of eight to 10. And the hardware needed to run the systems is typically a quarter of the price.

But perhaps the most compelling reason for a large organisation to consider changing to a best-of-breed system is that it will allow them to respond to changes in the market as nimbly as their rivals.

Keeping up with the latest technology is one of the key factors in remaining competitive. The march of technology is going to continue for some time yet, computing power will keep doubling every year and prices will fall.

With that additional power will come ever smarter, faster software and systems to help businesses operate even better. And for the foreseeable future all the evidence points to Windows as the platform where most of that innovation will occur.

At last, there is a viable alternative to the enterprise software solutions from SAP and Oracle. In fact, XP is now well positioned to deliver the killer punch and inflict enough damage to knock the heavyweights out of the enterprise market.

Philip Taylor is deputy chairman of SquareSum

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