Application software
Historical notes on the application software business. Related subjects include:
Notes on the technology supporting packaged application software
This is part of a three-post series on enterprise application software over the decades, meant to serve as background to a DBMS2 post on issues in enterprise apps.
- The first lays out very general issues in understanding and subdividing this multi-faceted sector.
- The second calls out characteristics of specific application areas.
- The third (this one) discusses application software products’ underlying technology.
0. I’d like to discuss the technology underneath packaged application software. To create some hope of the discussion being coherent, let’s split apps into a few categories:
- Major/core suite, large enterprises — e.g. ERP (Enterprise Resource Planning).
- Major/core suite, smaller enterprises — e.g., the province of Progress and Intersystems VARs (Value-Added Resellers).
- Remarkably distributed applications. This is where a lot of the more unusual technology choices cluster.
- Other point solutions. Sometimes, a guy just needs a catch-all category. 🙂
1. The idea of bundling ERP (or its predecessor MRP) with an underlying DBMS has been around for a long time.
- Cullinet and Cincom tried it, but with pre-relational DBMS. Oops.
- Oracle has always had that strategy.
- A sizable minority of SAP’s customers ran
And for smaller enterprises, it has been the norm, not the exception.
| Categories: Application software, Cullinet, Database management systems, IBM, Informix, Microsoft, Oracle, Pre-relational era, SAP, Sybase | 6 Comments |
Enterprise application software — vertical and departmental markets
This is part of a three-post series on enterprise application software over the decades, meant to serve as background to a DBMS2 post on issues in enterprise apps.
- The first lays out very general issues in understanding and subdividing this multi-faceted sector.
- The second (this one) calls out characteristics of specific application areas.
- The third discusses application software products’ underlying technology.
1. When I started as an analyst in 1981, manufacturers seemed to still be over 40% of the IT market. For them, the distinction between “cross-industry” and “vertical market” application software wasn’t necessarily clear. Indeed, ERP (Enterprise Resource Planning) can be said to have grown out of the combination of MRP and accounting software, although it never was a manufacturing-specific industry category. ERP also quickly co-opted what was briefly its own separate category, namely SCM (Supply Chain Management) software.
2. Manufacturing aside, other important early vertical markets were banking, insurance and health care. It is no coincidence that these are highly regulated industries; regulations often gave a lot of clarity as to how software should or shouldn’t work. Indeed, the original application software package category was probably general ledger, and the original general ledger packages were probably for banks rather than cross-industry.
| Categories: Application software, Pre-relational era | 8 Comments |
Enterprise application software — generalities
This is part of a three-post series on enterprise application software over the decades, meant to serve as background to a DBMS2 post on issues in enterprise apps.
- The first (this one) lays out very general issues in understanding and subdividing this multi-faceted sector.
- The second calls out characteristics of specific application areas.
- The third discusses application software products’ underlying technology.
1. There can actually be significant disagreement as to what is or isn’t an enterprise application. I tend to favor definitions that restrict the category to (usually) server software, which manages transactions, customer interactions, financial records and things like that. Some other definitions are even more expansive, including personal productivity software such as Microsoft Office, computer-aided engineering systems and the like.
2. Historically, application software has existed mainly to record and route information, commonly from people to machines and back. Indeed, one could say that applications are characterized by (up to) five (overlapping) aspects, which may be abbreviated as:
- Database design.
- Workflow/business process.
- User interface.
- Social/collaboration.
- Analytics.
The first four of those five items fit into my “record and route information” framework.
| Categories: Application software, Microsoft, Oracle, SAP | 6 Comments |
Application databases
In my recent post on data messes, I left an IOU for a discussion of application databases. I’ve addressed parts of that subject before, including in a 2013 post on data model churn and a 2012 post on enterprise application history, both of which cite examples mentioned below. Still, there’s a lot more that could be said, because the essence of an operational application is commonly its database design. So let’s revisit some history.
In many cases, installing an application allows enterprises to collect the underlying data, electronically, for the first time ever. In other cases the app organizes data that was already there in some previous form. Either way, applications tend to greatly change the way data is managed and stored.
| Categories: Application software, SAP | 5 Comments |
Software delivery and pricing — the first 55 years
The commercial computing, software and services industries have existed for half a century or so each. It might be interesting to review how their pricing and delivery models have evolved over time.
1960s and 1970s
Modern IT is commonly dated from the introduction of the IBM 360 mainframe in 1964-5. But even before then, there was a growing industry in what we’d now call outsourced services, specifically in payroll processing; major players included Automatic Data Processing (ADP), the company that gave us Senator Frank Lautenberg, and a variety of banks. This was (and to this day remains) a comprehensive service, priced by unit of work (e.g., number of payroll checks cut).
IBM mainframes, which quickly came to dominate the market, were in the 1960s and 70s commonly rented. IBM software that ran on them was hence typically priced on a rental/subscription basis as well. The independent packaged software companies, however, often preferred to get paid up front,* and hence sold perpetual licenses to their software. Annual maintenance fees for the licensed software started in the range of 10% of the perpetual license or even less, but migrated up to today’s 20-22% range.
| Categories: Analytics, Application software, ASK Computer Systems, Computer Associates, Computer services, Cullinet, EDS, IBM, MSA, Oracle | 10 Comments |
Enterprise application software, past and present
I recently wrote a long post on the premise that enterprise analytic applications are not like the other (operational) kind. That begs the question(s): What are operational enterprise applications like?
Historically, the essence of enterprise applications has been data management — they capture business information, then show it to you. User interfaces are typically straightforward in the UI technology of the era — forms, reports, menus, and the like. The hard part of building enterprise applications is getting the data structures right. That was all true in the 1970s; it’s all still true today.
Indeed, for many years, the essence of an application software acquisition was the database design. Maintenance streams were often unimportant; code would get thrown out and rewritten. But the application’s specific database structure would be adapted into an extension to the acquirer’s own.
Examples that come to mind from the pre-relational era include: Read more
| Categories: Application software, Cullinet, McCormack & Dodge, MSA, Pre-relational era, SAP | 2 Comments |
A software marketing pitch from 1972
In the process of researching my recent post on Management Horizons Data Systems, I came across an excerpt from a 1972 marketing brochure (quoted in the “History of Management Horizons” piece cited there). General notes include:
- The brochure quote basically pitches business intelligence/ performance management, with unconstrained drilldown.
- Pitching BI/analytics benefits for what start out as being transactional applications has been going on for pretty much the whole history of the applications industry. This just happens to be a great proof point.
- The unconstrained drilldown part could almost be taken for granted today, in the relational era. In 1972, however, it was a rather bold (and for all I know exaggerated) claim.
The exact verbiage is: Read more
| Categories: Analytics, Application software, Computer services | Leave a Comment |
Sterling Commerce predecessor company Management Horizons Data Systems (MHDS)
I started drafting this post along with others around the time of my parents’ deaths, then put it aside. However, I have been informed that my father’s old colleague Alton Doody has cancer himself, and if we are ever to get his input, it would be best to solicit it REALLY SOON. 🙁 So I’m finishing this up now as best I can.
Here’s the part I know from my own memories as
- The son of a Management Horizons employee (namely my Dad).
- A software industry stock analyst (in particular, one who followed Informatics General).
My father moved to the Columbus area in 1973 to join Management Horizons, a consulting firm serving retailers. Management Horizons had its own spin-out already, a time-sharing company called Management Horizons Data Services (MHDS), with which it still shared a building on what is now Old Henderson Road in Upper Arlington. And, this being a world full of coincidences, MHDS is very on-topic for the primary focus of this blog (software industry history).
MHDS’ main business was a full suite of what we might now call ERP for distributors and/or retailers. That never amounted to much. But its secondary business was an electronic interchange for direct placement of orders, called Ordernet. Ordernet turned into Sterling Commerce, a > $1/2 billion company that has been acquired for >$1 billion more than once.
The chain of events, roughly, is: Read more
| Categories: Application software, Companies and products, Computer services, Pre-relational era | 30 Comments |
Ray Lane and the integration of software and consulting at Oracle
Oracle pretty much doubled revenue every year until it got around the $1 billion level. Then things got tougher, industry-standard revenue recognition scandals not excepted. At one point there were only three buildings on the Oracle campus, with large portions of them eerily empty. But the ship righted itself, best exemplified by three transitions:
- Mature financial management arrived in the person of Jeff Henley.
- A serious commitment to product quality emerged, often credited to the late Bob Koii.
- Mike Fields* brought enterprise-class adult supervision to Oracle’s US field operations.
Political battles still raged at Oracle — Mike Fields vs. Craig Conway, Terry Garnett vs. Jerry Baker, and later on Mark Benioff vs. pretty much everybody. But the company was ready to move to next level. Read more
| Categories: Application software, Oracle, SAP | 10 Comments |
Software industry hijinks
The approach of April Fool’s Day has me thinking of software industry pranks and other hijinks. Most of what comes to mind is verbal jousting of various sorts that doesn’t really fit the theme. But there was one case in which ongoing business competition got pretty prankish: mainframe-era accounting software leaders MSA vs. McCormack & Dodge. Read more
| Categories: Application software, Fun stuff, McCormack & Dodge, MSA | 9 Comments |