Gartner predicts vendor bloodbath - possible casualties include Acer, Fujitsu, Borland, Apple

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[chance33_98]

Gartner predicts vendor bloodbath By Rob Jones at the Gartner Symposium, Cannes [08-11-2002]

BEA, Borland and Acer at risk of collapse Gartner analysts have painted a desperate picture for suppliers across all technology sectors, predicting widespread consolidation and company failure. With little hope of an increase in spending by corporates, sales of hardware, software and telecoms equipment will remain flat.

Some 65 per cent of chief information officers believe that next year their budgets will be flat or reduced.

Betsy Burton, vice president and research area director at Gartner said: "By 2004 half of the vendors that were in business in 2000 will not be anymore," she warned.

Gartner sees little innovation to offset future falls in licensing revenues as the emphasis shifts to services.

Many vendors will push into the outsourcing market, but struggle because it fundamentally changes the way they have traditionally worked with customers.

The analyst does not expect to start seeing growth in the software sector until 2008, and believes that Europe will lead the US in its take-off.

With the fall out, customers may see several established names disappear. Gartner said there is a 0.7 (from one) possibility that web services supplier BEA has no long-term future. It also believes that SunSoft is in danger.

"BEA is in a good position. The issue it has is that it must figure out how to expand beyond the application integration area," said Burton.

She added that Oracle has made it clear that "BEA is camping on its property and wants to kick it off". Under that pressure, the analyst does not believe the company can survive.

Borland is also in a difficult position. Having been forced to go on the acquisition trail to grow, it must now tie its new companies together.

"It's not impossible, [but] it's a challenge," said Gartner vice president Nick Jones. "Borland has to grow or shrink, because it can't stay at where it is today."

Burton explained that Siebel must move beyond customer relationship management and has to overcome its restrictive cultural reputation if it is to attract talented employees.

Among the hardware vendors, Gartner suggested that any company outside the top three of IBM, Dell and Hewlett Packsrd could be in danger. The possible casualties include Acer, Fujitsu and Apple.

In telecoms across Europe, there are many players but no leaders and little vision, the analyst said. For 3G, said Gartner, read 3D: Debt, Delay and Doubt.

"There are far too many mobile operators in Europe," commented Jones. "There's room for three operators in most countries and for three big pan-European operators."

He also attacked the way mobile communications standards are developed, describing Bluetooth as a disappointment and warning that Mobile Messaging Service will not reap the financial rewards many are hoping for.

[sinkspur]

I'm in the software business and everybody's cutting to the bone to keep annual license revenue.

The only part of our business that is growing is offshore outsourcing. Everybody we talk to is interested, if it will cut even 20% off current costs. And it will.

[Cicero]

The early days of wild and piratical innovation, which Borland represented, seem to be over. A lot of small individual shareware people went out of business, too, with the shift to the 32-bit operating system. A few people have survived by sticking to a modest game plan, like Niko Mak and WinZip.

I'd love to see Oracle get its commupance.

[Blue Screen of Death]

I'd love to see Oracle get its commupance.

What? And put 23,000 sales associates and one programmer out on the street.

[tonyinv]

Borland doomed itself when it moved away from its core business, Development. Its got a great product in Delphi, and when they refocused on Development products a couple years ago, the future looked bright. I'm no business man, but even I can see that any company that needs to buy other companies for revenue is in trouble.

Borland's other problem, like most the industry is Microsoft. (I'm not Microsoft hater, I make my living off their products) Borland has a superior product with Delphi and with their Delphi-like Kylix, JBuilder, and CBuilder, but they just couldn't get them widely adopted. Microsoft works tirelessly to get coporations to either standardize on their products or to support their technologies.

The only thing thats keeping Delphi alive are the developers, although we are a dwindling breed. Alot of the shareware thats out there today is developed with Delphi. Its those developers that are getting companies to use Delphi as their development platforms, just not enough of them.

The only brightspot recently has been the deal between IBM and Borland for Kylix. If Linux really does take off, then borland might be in a better position. Especially with all us Delphi progammers moving over and feeling at home in Kylix.

[ccmay]

Apple is a special case. Their products are not commodities. We have been hearing this same claptrap for fifteen years and it never comes to pass.

-ccm

[lelio]

Fujistu put a nail in its own coffin with its recent hard drive fiasco: 4M hard drives could suffer from a problem with the epoxy that Cirrus Logic's vendor switched to which will eventually cause a short in the system.
It does show nicely how everyone's linked together and outsourcing to the (presumably) cheapest bidder can really bite you in the butt. What's the cost of replacing a drive including shipping and handling? Around $100 in current costs and future sales? Fujistu's got a $400M problem on its hands.
Who makes Dell's motherboards? They'll probably stay in business until the other ones left under bid them.
I thought Flextronics had the right business model: be agnostic to who you deal with and make everything, for example the XBox. However they've been faltering too. This whole market stinks.
My only hope of employment is to switch over from the language that everyone knows and can do 99% of the stuff needed, Perl, and go over to one that's highly complex and with less competition (I say that now!) Java. Paradoxically, I want Sun to make Java harder to use so I can stay employed.

[oc-flyfish]

The possible casualties include.. and Apple.

Oh please let it happen in my lifetime!

[ccmay]

Oh please let it happen in my lifetime!

Why on earth do you feel this way about a company that is responsible for 80% of the innovation in personal computers, yet holds only 5% of the market? Does it threaten the Borg somehow? Go back to your blue screen of death and leave us alone to get our work done.

-ccm

[TheEditor]

I'm not sure why anyone should be sounding the death knell for Borland *now*. Sure, a couple of years ago things looked really bad. But I believe a look at Borland's recent financials should give Delphi programmers(like myself) a smile.

[sinkspur]

Their products are not commodities.

Their hardware is.

Like SGI, Apple will become a niche, and will be a much smaller company.

[Paulus Invictus]

Gee, and what about Oracle's sail boat? Will it sink? Thanks to our asinine CEO, our little company gave them all kinds of freebies and they ignored us. If you want to see some really boring races, watch Oracle's boat slice through the H2O fighting off th US, Italians, Swiss and Kiwis. Ho Hum! It's the playboy's utimate high to spend gazillions to win a meaningless boat race. An example of truly useless, conspicuous spending.

[eno_]

Python. Apache-based app servers. And Web services.

This will do for free (as in speech) software what the .NET Web services stuff will do for Windows (if it ever gets out of beta).

[HamiltonJay]

hahaha.. While Java is not hard to use... I can tell you, like most languages, few people know how to use it well. Want to stay employed and make lots of money, get good at cleaning up the messes that those foreign outsourced and H1B developers create....

Most don't have a clue about architecting a system, just divide the problem into as many small pieces as possible so it can be done as fast as possible and get paid.... who cares if it breaks down in 6 months....

Remember, Messiah's cost more.

[eno_]

What market reasearch is failing to show is that free software is winning. When I download Debian, no money changes hands, but when I put it on a hitherto unused and obsolete server and start serving a site off it, I am creating value.

Now this may all be a very recessionary development in economic terms, but it does not indicate a lack of progress, just a kind of change that people are having a hard time understanding and, therefore, profiting from.

[HamiltonJay]

Wanna go for free, Jakarta-Tomcat and/or JBOSS. If its good enough for Knight-Ridder to run everything off of, it'll do for most needs. You need a DB, provided record locking is not a huge issue, Mysql....

Most sites are so over architected in terms of hardware and software its comical. Anyone dumb enough to pay 15k a year for a Servlet/JSP engine that serves only a few thousand users a day is wasting $$$. If you need high capacity, etc etc you can justify the $$, but if you just have some small little used app, you can do it a lot cheaper. (And that's not even talking about hardware costs).

[aruanan]

Among the hardware vendors, Gartner suggested that any company outside the top three of IBM, Dell and Hewlett Packsrd could be in danger. The possible casualties include Acer, Fujitsu and Apple.

Ha ha ha. Yeah, right. One of these six is not like the others. One of these six is not the same.

[eno_]

Amen brother! I know a very smart guy who started and partly funded a now-dead dot-bomb that stoked up on all kinds of spendy systems - Oracle among them - before they had any idea if what they were doing would work and what the actual business model would turn out to be.

Ironically, now that people know how to do things on the cheap, and it has been proven that overbuilding your dot-com is the road to ruin, there isn't even enough capital for doing it the cheap way.