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Paul Simon, Meet Enterprise Software

Dennis Byron

Sorry Paul Simon, but mama's gonna take that Kodachrome away.


If you ever wonder about the fact that old legacy in-house-developed COBOL code and 1960s-era packaged software such as COPICS/MAPICS is still hanging around your IT shop, consider that on June 22, 2009, Eastman Kodak announced that it will shortly retire Kodachrome color film, ending the film's 74-year availability in the market. In IT and enterprise software, as in the film business, the aircraft carrier turns slowly.


As of 2009, Kodak said, "Kodachrome film represents just a fraction of one percent of Kodak's total sales of still-picture film." As long as the percentage hovered at 1 percent, that sales figure was nothing to sneeze at. But clearly some line was crossed and the end has come, despite the plaintive, popular song of 1973.

 

Similarly, add-on/update/maintenance spending on old packaged applications and even development software with which to write applications inhouse still represents almost all the money you spend each year on enterprise software. You can still find MAPICS at Infor, COPICS at a firm called TFG, and a large percentage of the money you spend on applications with SAP and Oracle -- which first released still active packaged applications in 1972 and 1981 (via one of its acquirees), respectively -- is the IT equivalent of Kodachrome film.

 

It's been a few years since I did related market research, but I think IBM still realizes around a billion dollars a year in fees/rentals/etc. (that is, revenue similar to maintenance subscription revenue on perpetually licensed software) for the venerable Customer Control Information System (CICS). That's about 5 percent of all IBM's software-related revenue. CICS started as an application in IBM's Palo Alto labs in 1969 but shortly became THE standard for transaction monitoring. Oracle's TUXEDO (originally developed by AT&T and later marketed by Novell and BEA) is competitive with CICS and almost as "old." TUX was developed to provide transaction monitoring on UNIX systems (shortly after AT&T developed UNIX) similar to what CICS provided on mainframes. But TUXEDO probably only realizes 10 percent of CICS' revenue.

 

As I wrote about on June 10, "new new" is a small percentage of your software spend even in good times. In a tight budget year such as 2009, new-new spending shrinks like the sale of Kodachrome film has.



I mention all of this not simply because I liked Paul Simon's music or am old enough to remember COPICS, MAPICS, R/2 and Datalogix, but because there is a movement on to change the dynamics of the subscription maintenance fee business model that supports keeping such old software somewhat up to date. Be careful what you wish for.


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