Packaged software: Rules Drive The Tools

The domestic packaged software industry in 1998-99 matured

into a well-segmented, competitive arena with vendors targeting clearly defined market

segments through differentiated solutions. The industry grew only 15% over the previous

year, hit mostly by reduced buying by corporate and the enterprise users. While small and

medium enterprises were omnipotent in their demand levels for software applications, they

only helped marginally recover the slump in large corporate sales. Reduced shipments of

Unix systems and PCs to the corporate users hit both system and application

software vendors which is evident from the relatively lower domestic growth levels for

vendors like Microsoft, Oracle, Baan, Infosys, CITIL, TCS, SDRC and QAD over the previous

year.

In the domestic application software market the largest

segments are ERP, design software and RDBMS.

ERP



Major orders included SAP for Arvind Mills, Baan for Dabur and Thermax, Oracle Empower for
the Maharashtra and West Bengal Electricity Boards, i2 Technologies for Asian Paints and

QAD for UA Automotive and Bacardi. A new entrant was PeopleSoft being implemented by

Pricewaterhouse- Coopers at Hindustan Lever and Maharashtra State Electricity Board. The

homegrown low-cost MakESS also garnered some respectable clients, including Delhi Metro

Railway, Malpani Agro and IBP Caltex.

CAD/CAM



Parametric Technology had a worldwide release of Windchill and this was followed later in
the year by AutoCAD 2000 from Autodesk. Both these releases along with the advent of the

SGI NT workstation helped to lower price points for the NT design environment. GIS also

witnessed increased interest, with Tata Infotech pushing Map Info and ESRI pushing its

solutions through various end-user conferences and road shows.

RDBMS



Here the hottest trade-offs took place between Oracle8i and Microsoft SQL Server, with
Oracle's rhetoric proving ineffective in slowing down the onslaught of SQL Server 7. At

the end of the year, Oracle8i had few customers to name, but SQL Server had penetrated the

enterprise ERP and even the Department of Posts for the latter's national savings scheme.

Enterprise systems management



Unicenter TNG from Computer Associates was implemented at a number of important corporate
sites, including Stock Holding Corporation, Bharti BT, Maruti and Escorts. Microsoft

replied with its Digital Nervous System the preferred utility at Infosys. An important

development is the acceptance and penetration of data warehousing solutions. While SAS

Institute has been targeting government organizations, vendors like IIS

Infotech, which is

marketing Cognos, have roped in private data-rich institutions like Star TV and ICICI

Bank.

Other niches



In other application segments, the financial accounting solution Tally from
Peutronics continued to make inroads in the domestic SME segment. Banking vendors Infosys

and CITIL were less well-off, either because the domestic markets were no more their focus

or their favorites were not responding. In groupware, an almost exhausted Lotus came back

with a bang with Notes Release 5. Microsoft responded by pushing Exchange Server as the

best groupware. Office 2000 was launched and by front-ending with Exchange and SQL Server,

it promises collaboration across the Net as a replacement for collaboration across

networks. A never-look-back transition into tomorrow.

With corporate recession on the downslide in 1999-00,

increased spending by the large and medium enterprises appears assured. And with

segmentation in the domestic software market well underway, the next twelve months look

positive for most software vendors. A new star on the horizon is the Internet, with global

software vendors Web-enabling most of their applications. That is definitely one segment

we will see in the domestic market only at the end of the next twelve months.

Packaged Software Market Trends

DATAQUEST