Oracle and Microsoft’s brand value is tanking among IT purchasers according to a study by a US market research firm, but PeopleSoft may be winning a sympathy vote over its current takeover plight.
In addition the Q3 Techtel Tech Demand Index found that an improving economy boosted by a rising stock market is slowly improving spending plans and resulting demand for IT in general. Overall, TDI indicated a 15 per cent year on year improvement, while for the second consecutive quarter, overall technology purchases continued on an upward trend rising 2 per cent.
"This reduces the threat to further growth that we have been warning about for the past two quarters," said Michael Kelly, CEO of Techtel Corporation. "It's a promising sign of growth to come."
New interest is being shown in financial applications software in response to new regulatory requirements from government. Furthermore buyers are showing more enthusiasm for CRM, while interest in outsourcing and systems integration is again growing in the largest companies.
"IT market demand is now like a crowded Southwest Airlines gate 30 minutes before departure," said Kelly. "Everyone is still sitting and watching everyone else to see what they're doing, ready to rush into a line when others move. When it happens, it happens fast, but not just yet.
“Once competitive factors and a fear of being left behind replace the 'asset protection' thinking of recessions, people give up their seat and head for the gate. We are seeing this thinking start to percolate through the economy. It takes time, and eventually hits a tipping point, up. How much up remains to be seen."
Techtel also tracks the market's opinion of a large number of companies. Companies with falling brand image are more likely to have a harder time attracting customers, employees, investors and partners versus organisations with higher opinion.
Dell, Hewlett-Packard, Intel and IBM are companies that remain strong brand leaders, with Symantec continuing to move up the brand leader echelons.However, Oracle and Microsoft have seen their brand image deteriorate. "The market's opinion of Microsoft and Oracle, the number 1 and 2 software companies in the world, has each declined by over 20% in less than three years. Their brand images are in free-fall and no seems to know why, or even care."
But one company that did pick up last quarter is PeopleSoft, which Kelly said benefited from higher profile due to Oracle’s hostile takeover bid.