SHORT TAKES: Snake Oil

A software vendor tells you he has a CRM package that will double your customer base and quadruple your profits in 90 days. Don’t buy it! According to a new report by AMR Research, the promise of business-to-business (B2B) commerce is more real than the software that purports to deliver it.

As major software companies forecast declining sales, the market has reached what AMR defines as an inflection point, or a sharp drop-off in the year-over-year growth rate of software sales, occurring when foundation technology changes so much that it renders current applications essentially obsolete — creating a need for new software development. Back in the early 1990s, the software sector took a dive when technology buyers and developers became infatuated with Windows-based client/server applications and hyped them up even though the technology would not really be available for several years. AMR says that today’s inflection point mirrors the one of a decade ago. Familiar symptoms include a rush to capitalize on technology; new companies built around killer apps, not real business requirements; software vendors struggling because they waited too long to reconfigure their programs; and the emergence of new software leaders.

Hope prevails, however, for the future of software sales. AMR predicts that the market will rebound in 12-18 months. In the meantime, make the best of what you already have. For more information, contact AMR Research, Inc. at (617) 542-6600.

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