Listening today at Salesforce.com CEO Marc Benioff at GigaOM’s Infrastructure 09 conference, one would think that the enterprise software business is a real racket… or cash-cow, depending on where you stand!
“The way enterprise software has worked for a lot of the large scale CIOs… You buy these enterprise software products maybe 10 years ago… and let’s say you paid a million dollars for that product.
Well Oracle and SAP charges you 22% a year on what you paid 10 years ago, even if they haven’t given you any updates or upgrades or anything. Just to have it on your servers,” explains Benioff.
That’s a lot of money considering that you are running on old infrastructures, architectures, etc… But as Benioff pointed out, it will take a while for CIOs to get out of the grip of traditional software companies like Oracle or SAP and move their infrastructure to the cloud; simply because it’s complex and requires to be highly integrated.
And, if ain’t broken… don’t fix it!
Here’s a short video clip of Benioff’s remarks on why the enterprise software business is a real racket for companies:
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