The change has begun – HP Software revenue declines further

Did anyone see this today. HP reported that their Business Technology Optimization revenue declined 16% year on year.

Now, of course that’s caused by the global recession right? Or is it?

BMC recently reported that their ESM bookings had declined by 9% year on year in their latest quarter. Let’s think about that one for a second….Bladelogic seems to be doing great (big relationship with Cisco etc), Remedy is probably holding up, so Patrol/Service Assurance is likely collapsing fast.

Maybe it’s caused by the fact that now, more than ever, some of these large vendors are under attack from fresher technologies, flexible business models and value based pricing. These products are already overly complex and over-priced but Cloud Computing demands flexibility, pay as you use pricing and low overhead/maintenance.

That’s clearly something that vendors who are reliant on huge, multi-million dollar perpetual license fees from large customers who have previously not had a choice, are going to have a difficult time dealing with.

Now of course, this is my own personal opinion but I talk to a lot of customers and I know that there is a lot of replacement business is happening and it appears to be accelerating.

As previously blogged, I truly believe that in the “management stack”, like so many others, Cloud changes everything and the large software vendors of today have a limited time period to either adapt or be rendered dinosaurs.

We’ll see….

24 Responses to “The change has begun – HP Software revenue declines further”

  1. Nicholas Monaco says:

    The biggest problem with HP is not the hardware or the customer service. Both are more than adequate. The biggest problem with HP (speaking only for myself and others in my company) is their lack of flexibility with their software and consumables. After a large printer sale for instance they gave only enough ink to prime the system! We had to buy ink cartridges the first day of office use! What kind of company would do this to their own customers?? This philosophy of doing business is turning away customers. I know my company will not buy HP products again due to this “nickel and dime” approach. They seem to have forgotten about the customer’s needs and cares. My company can afford to throw these things in the trash and replace them with something more customer oriented. And they probably will.. To bad for HP, maybe someday they will wake up to the fact that for a healthy bottom line you have to keep the customer satisfied and happy.

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