Are large Enterprise software vendors in danger?

I just read an interesting post titled
OSBC: enterprise applications next wave for open source

The post is about the keynote speech at the Open Source Business Conference given by Larry Augustine.

Augustine postulates that the current large enterprise software model is broken. He concludes that the current model does not cater to small to medium business, citing long sales cycles, and expensive licensing. Large software companies put 76% of new license revenue toward sales marketing. This is ironic because essentially these venders are charging their customers to convince them to buy their software.

I find this interesting as our small little software group is trying to replace one of the CRM applications that we currently use with an in house solution. We think we can do a better job for a lower price. Even though we are a small software group, we are inside a very large company; if we are steering away from a large enterprise solution, then perhaps the current enterprise model may be broken for more than just small to medium business.

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