Home > Side conversations, The economy > Who will buy enterprise software (or the next bubble)

Who will buy enterprise software (or the next bubble)

It’s tough to build enterprise software.  It’s even more difficult to sell it.  Enterprise software runs the business of many companies and the buyers are very demanding and diligent in their evaluation efforts.

But what if the corporate community of enterprise software buyers cannot buy the software because their financial performance does not allow them to think beyond immediate cost-cutting measures?

No one wants to see another bubble to burst in the fragile fabric of US economy.  Yet it’s prudent to ask whether another bubble could be around the corner.

This November 15, 2009 news article from New York Post (The Next Bubble:  Spike in PE-owned firm defaults ahead) was very troubling.  According to the article:

“In December 2008, the Boston Consulting Group, which advises PE firms, predicted that almost 50 percent of PE-owned companies would probably default on their debt by the end of 2011. It also believed there would be significant restructuring at these companies, leading to massive cost cuts and difficult layoffs.

A rain of defaults is already starting. From January 1 through October 31, 2009, 175 American companies defaulted on their debt. That is almost double the number for all of 2008. Half of those companies have been involved in transactions with PE firms at some point in their corporate life, according to the Standard & Poor’s rating agency.”

American software industry is the leader in innovation which fuels traditional and new business models.   I hope future enterprise software buyers will still have the budgets to buy the right solution to help them grow and expand.

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