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ChangeWave Research: Corporate IT Purchasing – Software and Security Survey

ChangeWave Research Report:Corporate Software & Security Purchasing Modest Increase in 2005 Software Spending – led by IT Security; Cognos & Salesforce.com Gain Among 2nd Tier CompaniesOverview

Recent Alliance surveys have shown signs of a modest uptick in corporate software purchasing, led by strong increases in IT security. This report summarizes a March 30 – April 1, 2005 Alliance survey on corporate spending for software and security. A total of 554 members involved with spending on software/security for their company participated.

(A) Software

Modest Increase in 2005 Software Spending. A total of 27% of respondents say their company plans to spend more for software in 2005 compared to 2004, while 18% say they plan to spend less. The top reasons cited for a spending increase were “Growth/New Employees” (17%) and “To Improve Productivity” (15%).

IT Security Software Leads All Categories. IT Security (44%) is the top software category respondents say their company is purchasing in 2005, followed by Data Storage and Management (24%), Application Server Software (20%) and Database Management Software (20%).

Cognos and Salesforce.com Gain Ground. We looked at small to mid-sized vendors, and Cognos (Net Difference Score = +13) and Salesforce.com (+11) were the two leaders in terms of gained market share in respondent companies in 2005. Business Objects (+6) and Tibco Software (+6) also appear to be gaining share.

Ariba Losing Ground. On the down side, Ariba (-2) was the software vendor that has lost the most market share among Alliance respondent companies. Progress Software (-1) and Manugistics Group (-1) were also seen as losing market share.

Company Satisfaction Ratings. When asked to rate their companies overall satisfaction with small to mid-size vendors, respondents gave the highest satisfied ratings to Microstrategy (84%) and Agile Software (80%). At the other end of the spectrum, Vignette (50%) and Progress Software (47%) received the lowest ratings.

What’s Driving the Purchasing Decision? Better than a third of respondents (36%) say that “replacing outdated existing software” is the top driving force behind their companies’ software purchasing decisions. “An Improvement in business conditions/budgets,” (15%) and “New software Capabilities” (14%) were also cited.

Copyright ©2005 ChangeWave ResearchAll rights reserved.

April 29, 2005


(B) IT Security

Budget Increases. A total of 58% of respondents say their IT Security software budget increased in 2005. One in five (20%) say it increased more than 10%.

Anti-Virus Software Spending Leads. The greatest security spending increases were in Anti-Virus Software (Net Difference Score = +40), Anti-Spyware Software (+29) and Spam Filtering Software (+28). On the down side, Disaster Recovery Software/Services (-15) showed the least spending. Surprisingly, spending for Authentication and Identification Software was flat.

Anti-Virus Software is Also the Top Corporate Priority. Respondents say Anti-Virus Software (21%) is the top security spending priority for their companies, followed by Enterprise/Network Security Software (14%) and Backup/Recovery Software (13%).

Top IT Security Concerns. The single greatest IT security concern facing respondent companies today is “Protecting their Network Against Attacks,” (27%), followed by Viruses (23%) and Spyware/Malware (17%).

Bottom Line: These survey findings point to a modest increase in corporate software spending in 2005, led by strong IT security spending.

Cognos and Salesforce.com are the leading small to mid-size software vendors gaining market share within member companies, while Microstrategy and Agile Software received the best customer satisfaction ratings.

Anti-Virus software showed the greatest spending increase and ranks as the #1 corporate security spending priority. Not surprisingly, “protecting their network against attacks” ranks as the single greatest security concern facing respondent companies today.

The ChangeWave Alliance is a group of 5,000 highly qualified business, technology, and medical professionals in leading companies of select industries—credentialed professionals who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.

Helping You Profit From A Rapidly Changing World ™www.ChangeWave.com

Copyright ©2005 ChangeWave Research All rights reserved.

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Table of Contents

Summary of Key Findings.............................................................................................4

The Findings...................................................................................................................5

(A) Software ..........................................................................................................5

(B) IT Security......................................................................................................12

ChangeWave Research Methodology........................................................................32

About ChangeWave Research....................................................................................33


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I. Summary of Key Findings

Introduction

Recent Alliance surveys have shown signs of a modest uptick in corporate software purchasing, led by strong increases in IT security. This report summarizes a March 30 – April 1, 2005 Alliance survey on corporate spending for software and security. A total of 554 members involved with spending on software/security for their company participated.

This report focuses on 2 key areas:

(A) Overall Software Trends(B) IT Security


4

Modest Increase in 2005 Software Spending 27% of respondents say

their company plans to spend more for software in 2005 compared to 2004

18% say they plan to spend less

Top Reasons for Software Spending Increase Growth/New Employees

(17%) To Improve Productivity

(15%)

Forces Driving the Purchasing Decision Replacing Outdated

Software (36%) Improved Business

Conditions (15%) New Capabilities (14%)

2005 Purchasing PlansTop Software Categories IT Security Software (44%) Data Storage and

Management (24%) Application Server

Software (20%) Database Management

(20%)

Small to Mid-Size Vendors -- Market Share Gainers Cognos (Net Difference

Score = +13) Salesforce.com (+11) Business Objects (+6) Tibco (+6)-- Market Share Losers Ariba (-2) Progress Software (-1) Manugistics Group (-1)

Companies With Highest Satisfaction Ratings Microstrategy (84%) Agile Software (80%)

IT Security Software Budget Increases 58% say their IT Security

budget increased in 2005. One in five say it increased more than 10%

Biggest Winners Anti-Virus Software (Net

Difference Score = +40) Anti-Spyware SW (+29) Spam Filtering SW (+28)

Top Spending Priorities Anti-Virus Software (21%) Enterprise/Network

Security Software (14%) Backup/Recovery

Software (13%)

Top IT Security Concerns Protecting/Securing

Network Against Attacks (27%)

Viruses (23%) Spyware & Malware (17%)


II. The Findings

Total Respondents (n = 554)

(A) Software

(1) Question Asked: How would you characterize your company's spending plans for software in 2005 compared to 2004? We are planning to spend more for software in 2005 compared to 2004 27%We are planning to spend less for software in 2005 compared to 2004 18%There has been no change in spending plans for software in 2005 compared to 2004 43%Don't Know 11% Modest Increase in 2005 Software Spending. A total of 27% of respondents say their company plans to spend more for software in 2005 compared to 2004, while 18% say they plan to spend less.

(1A) Question Asked: Why is your company planning to spend more on software in 2005 than in 2004? (n = 127)

Growth/New Employees 17%To Improve Productivity 15%New Features 9%Need-Based/Delayed 8%New Hardware/Equipment Which Requires New Software 7%To Improve Security 6%Consolidation/Integration 4%New/Special Project 4%Regulatory Requirements (e.g., SOX, HIPPA, etc.) 4%To Continue Service/Support 3%General Upgrade/Other 23%

Top Reasons for Spending Increase. Among respondents who say their company is planning to spend more on software in 2005, the top reasons cited for a spending increase were “Growth/New Employees” (17%) and “To Improve Productivity” (15%).

As respondent EGA4355 writes, “We are increasing the number of employees so we need to install new software licenses for them; we are also introducing new services." Respondent INT8321 adds, “To maintain productivity and competitiveness."

A Sample of Alliance Member Responses can be found in Appendix A, page 17.


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(2) Question Asked: What types of software will your company be purchasing in 2005?Security Software 44%Data Storage and Management 24%Application Server Software 20%Database Management 20%Network Management 18%Business Intelligence and Reporting 14%Customer Resource Management (CRM) 14%Document and Content Management 13%Portal and E-Business Development 12%Enterprise Resource Planning (ERP) 9%Supply Chain Management/Procurement 8%Legacy Platforms 5%No Plans to Purchase Software in 2005 12%Don't Know 11%Other 8%

IT Security Software Leads All Categories. IT Security (44%) is the top software category respondents report their company is purchasing in 2005, followed by Data Storage and Management (24%), Application Server Software (20%) and Database Management Software (20%).

(2B) Question Asked: Which of the following vendors is gaining market share in your company this year?

Cognos (COGN) 17%SalesForce.com (CRM) 15%Microstrategy (MSTR) 9%Agile Software (AGIL) 8%Business Objects SA (BOBJ) 8%TIBCO Software (TIBX) 8%Hyperion Solutions (HYSL) 7%JDA Software (JDAS) 7%FileNet Corp (FILE) 6%Webmethods Inc (WEBM) 6%Ariba (ARBA) 5%Ascential (ASCL) 5%Broadvision (BVSN) 4%Manhattan Assoc. (MANH) 4%Retek (RETK) 4%Vignette (VIGN) 4%Manugistics Group (MANU) 3%Progress Software (PRGS) 2%MatrixOne (MONE) 1%RightNow Technologies (RNOW) 1%


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(2C) Question Asked: And which of the following vendors is losing market share in your company this year?Ariba (ARBA) 7%FileNet Corp (FILE) 5%Webmethods Inc (WEBM) 5%Agile Software (AGIL) 4%Cognos (COGN) 4%Manugistics Group (MANU) 4%Microstrategy (MSTR) 4%SalesForce.com (CRM) 4%Vignette (VIGN) 4%Progress Software (PRGS) 3%Broadvision (BVSN) 2%Business Objects SA (BOBJ) 2%Hyperion Solutions (HYSL) 2%JDA Software (JDAS) 2%TIBCO Software (TIBX) 2%Manhattan Assoc. (MANH) 1%MatrixOne (MONE) 1%RightNow Technologies (RNOW) 1%Ascential (ASCL) 0%Retek (RETK) 0%

Net Difference Score–Vendors Gaining Market Share vs. Vendors Losing ShareVendors Gaining Market Share

Vendors Losing Market Share

Net Difference

Score

Cognos (COGN) 17% 4% +13SalesForce.com (CRM) 15% 4% +11Business Objects SA (BOBJ) 8% 2% +6TIBCO Software (TIBX) 8% 2% +6Ascential (ASCL) 5% 0% +5Hyperion Solutions (HYSL) 7% 2% +5JDA Software (JDAS) 7% 2% +5Microstrategy (MSTR) 9% 4% +5Agile Software (AGIL) 8% 4% +4Retek (RETK) 4% 0% +4Manhattan Assoc. (MANH) 4% 1% +3Broadvision (BVSN) 4% 2% +2FileNet Corp (FILE) 6% 5% +1Webmethods Inc (WEBM) 6% 5% +1MatrixOne (MONE) 1% 1% 0RightNow Technologies (RNOW) 1% 1% 0Vignette (VIGN) 4% 4% 0Manugistics Group (MANU) 3% 4% -1Progress Software (PRGS) 2% 3% -1Ariba (ARBA) 5% 7% -2


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Cognos and Salesforce.com Gain Ground. We looked at small to mid-sized vendors, and Cognos (Net Difference Score = +13) and Salesforce.com (+11) were the two leaders in terms of gaining market share in respondent companies this year.

Ariba Losing Ground. On the down side, Ariba (-2) was the software vendor that had lost the most market share among Alliance respondent companies. Progress Software(-1) and Manugistics Group (-1) were also seen as losing market share.

(2D) Question Asked: How satisfied is your company with the following vendors? (Please rate only those that your company has previously purchased products from or had experiences with) Satisfied Unsatisfied Very

SatisfiedSomewhat Satisfied

Somewhat Unsatisfied

Very Unsatisfied

Microstrategy (MSTR)

84% 16% 13% 71% 16% 0%

Agile Software (AGIL)

80% 20% 24% 56% 16% 4%

Hyperion Solutions (HYSL)

78% 22% 26% 52% 19% 3%

TIBCO Software (TIBX)

78% 23% 15% 63% 19% 4%

Ascential (ASCL)

77% 23% 15% 62% 15% 8%

Webmethods Inc (WEBM)

77% 22% 19% 58% 16% 6%

Cognos (COGN)

71% 29% 23% 48% 25% 4%

Business Objects (BOBJ)

70% 30% 15% 55% 20% 10%

FileNet Corp (FILE)

69% 31% 21% 48% 21% 10%

Manhattan Assoc. (MANH)

69% 31% 23% 46% 31% 0%

Retek (RETK)

69% 31% 15% 54% 31% 0%

Ariba (ARBA)

65% 35% 16% 49% 30% 5%

JDA Software (JDAS)

65% 35% 13% 52% 26% 9%

SalesForce.com (CRM)

64% 34% 12% 52% 28% 8%

Manugistics Group (MANU)

62% 38% 8% 54% 21% 17%

Broadvision (BVSN)

60% 39% 14% 46% 32% 7%

MatrixOne (MONE)

59% 42% 17% 42% 42% 0%


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Vignette (VIGN)

50% 50% 8% 42% 50% 0%

Progress Sftwre (PRGS)

47% 53% 18% 29% 41% 12%

Company Satisfaction Ratings. When asked to rate their companies overall satisfaction with small to mid-size vendors, respondents gave the highest satisfied ratings to Microstrategy (84%) and Agile Software (80%). At the other end of the spectrum, Vignette (50%) and Progress Software (47%) received the lowest ratings.

(3) Question Asked: From the above list of vendors, which one would you say your company has been most satisfied with, and which one have you been least satisfied with? Please mention why.

A sample of Alliance member responses can be found in Appendix B on page 20.

(4) Question Asked: Looking at the following areas, which one is most driving your software purchasing decisions? Existing software is getting outdated and must be replaced 36%A general improvement in business conditions and capital budgets 15%New software capabilities are accelerating the replacement cycle 14%Improved customer service 6%New software is easier to use 3%

We currently do not need to purchase any new software 14%General slowdown in business conditions and capital budgets 4%We are waiting for new technology enhancements before purchasing new software

3%

Other 5%

What’s Driving the Purchasing Decision? Better than a third of respondents (36%) say that “replacing outdated existing software” is the top driving force behind their companies’ software purchasing decisions. “An Improvement in business conditions/budgets,” (15%) and “New software Capabilities” (14%) were also cited as driving the replacement cycle.


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(5) Question Asked: Many analysts believe the introduction of the Sarbanes-Oxley Act and the HIPAA regulations have caused companies to increase spending on managing and retaining their email communications.

Has your company purchased Email Management Software in the past year? Yes, we purchased Email Management Software in the past year 9%No, but we plan to purchase Email Management Software in the next 12 months 11%No, we have not purchased Email Management Software in the past year and have no plans to purchase it in 2005

80%

(5A) Question Asked: What is the primary reason your company purchased or plans to purchase Email Management Software? (Please name specific vendor you chose or are considering.)

Regulatory Requirements Forcing Email Management Software Purchases. One-in-five respondents (20%) say they either purchased Email Management Software in the past year or plan to purchase it in the next 12 months. Among these respondents, Regulatory Requirements (41%) tops the list as the primary reason for the purchase.

A sample of Alliance member responses can be found in Appendix C on page 28.


Regulatory Requirements 41%Increase/Upgrade Performance 27%Backup/Recovery/Storage 10%Marketing Purposes 5%Spam 5%Don’t Know/Other 15%

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(6) Question Asked: Enterprise Resource Planning software (ERP) has generally been known to operate on a five year upgrade/replacement cycle. It has also been five years since the implementation of large scale software changes and upgrades associated with Y2K, and some analysts believe this may result in an increase in ERP software purchases.

Is your company planning any major investments in 2005 to upgrade or replace your existing Enterprise Resource Planning (ERP) software system? This chart includes only respondents who are knowledgeable about ERP software investment plans for their company. (n=186)

Yes, we have major investment plans in 2005 to upgrade/replace ERP software 15%Yes, we have major investment plans to upgrade/replace ERP software, but not until 2006 or later

10%

No, we have no major investment plans to upgrade/replace existing ERP software

75%

ERP Software Investment Plans. Of those who use Enterprise Resource Planning (ERP) software, 15% say their company has major investment plans to upgrade/ replace ERP software in 2005 and another 10% say their company has major ERP investment plans, but not until 2006 or later.

(6A) Question Asked: Is this investment increase at all related to replacing or upgrading software implemented for Y2K? (n=46)

Yes 24%No 70%Don't Know 6%

Y2K Replacements/Upgrades Impacting ERP Investment Plans. Of the respondents who say their company has major ERP software investment plans, nearly one-quarter (24%) say it is related to replacing or upgrading software implemented for Y2K.


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(B) IT Security Software (7) Question Asked: Has your spending budget for security related software increased in 2005 compared to 2004? Yes, between 1%-10% 38%Yes, between 11%-25% 15%Yes, more than 25% 5%Our Security Software Budget is Flat 26%Our Security Software Budget is Declining 4%Don't Know 13%

Budget Increases. A total of 58% of respondents say their IT Security software budget increased in 2005. One in five (20%) say it increased more than 10%.

(8A) Question Asked: Where are you seeing the greatest increases in IT security spending within your company?

Anti-Virus Software 55%Anti-Spyware Software 45%Spam Filtering Software 44%Enterprise/Network Security Software 37%Backup/Recovery Software 31%Authentication and Identification Software 23%Disaster Recovery Software/Services 19%Other 3%No Answer 1%

(8B) Question Asked: And where are you seeing the smallest increases (or no increase) in IT security spending within your company?

Disaster Recovery Software/Services 34%Backup/Recovery Software 30%Authentication and Identification Software 23%Enterprise/Network Security Software 17%Anti-Spyware Software 16%Spam Filtering Software 16%Anti-Virus Software 15%Other 1%No Answer 12%


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Net Difference Score – IT Security Spending Increases vs. Decreases

Increase in IT Security Spending

Decrease in IT Security Spending

Net Difference

ScoreAnti-Virus Software 55% 15% +40Anti-Spyware Software 45% 16% +29Spam Filtering Software 44% 16% +28Enterprise/Network Security Software 37% 17% +20Backup/Recovery Software 31% 30% +1Authentication and Identification Software

23% 23% 0

Disaster Recovery Software/Services 19% 34% -15

Anti-Virus Software Spending Leads. The greatest security spending increases were in Anti-Virus Software (Net Difference Score = +40), Anti-Spyware Software (+29) and Spam Filtering Software (+28). On the down side, Disaster Recovery Software/Services (-15) showed the least spending. Surprisingly, spending for Authentication and Identification Software was flat.

(9A) Question Asked: What are your company's top spending priorities in security software?

Anti-Virus Software 21%Enterprise/Network Security Software 14%Backup/Recovery Software 13%Remote Access Authentication and Identification Software 11%Desktop Anti-Spyware Software 9%Spam Filtering Software 9%Disaster Recovery Software/Services 6%Server Anti-Spyware Software 6%Local Access Authentication and Identification Software 4%Security for Protecting Web Assets 2%Other 2%

Anti-Virus Software is Also the Top Corporate Spending Priority. Respondents say Anti-Virus Software (21%) is the top security spending priority for their companies, followed by Enterprise/Network Security Software (14%) and Backup/Recovery Software (13%).


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(9B) Question Asked: Regarding your company's overall IT security, what is the single greatest concern you're facing today? Protecting/Securing your Network Against Attacks (e.g., firewalls) 27%Viruses 23%Spyware and Malware 17%Authentication and Identification for Users Outside the Enterprise 14%Spam 7%Hackers 5%Authentication and Identification for Users Inside the Enterprise 4%Other 2% Top IT Security Concerns. Twenty-seven percent (27%) of respondents say “Protecting their Network Against Attacks” is the single greatest IT security concern facing their company today, followed by Viruses (23%) and Spyware/Malware (17%).

(9C) Question Asked: What was the last crisis your company faced that required an immediate purchase of security software (i.e., within 60 days)? What type of software did you purchase and who was the vendor? (n = 63)

Norton/Symantec 28%McAfee 8%Microsoft 5%Checkpoint 5%Trend Micro 5%Other Vendor 13%No Vendor Named 37%

When asked to name the last crisis their company faced that required an immediate purchase of security software, Virus Attacks were the leading response, and better than one-quarter (28%) of those named Norton/Symantec as the vendor they purchased. McAfee (8%) was the vendor with the second highest mentions.

A sample of Alliance member responses can be found in Appendix D on page 30.


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(9D) Question Asked: Where is the first place your company looks when considering an upgrade or purchase of security related software? Current security software provider 44%Best in class of security product 28%Current platform software vendor (e.g. Microsoft, SAP) 12%Current networking software vendor 8%Current networking hardware vendor 3%Other 6%

Companies Look to Current Security Vendor First. Forty-four percent (44%) of respondents say their company first looks to their current security software provider when considering an upgrade or purchase of security related software. Another 28% say that they look to the “Best in Class Security Product.”

(9E) Question Asked: From which of the following vendors is your company purchasing Authentication and Identification products and services for access from outside the enterprise? Microsoft 17%It is part of our Enterprise Security System 12%Check Point Software 10%RSA Security 9%Verisign 9%Netegrity 4%Novell 3%Veritas 3%Internet Security 2%Entrust 1%iPAS 1%CloudMark 0%Critical Path 0%Oblix 0%Radware 0%We do not use any Authentication and Identification software 20%Other 8%

Top Authentication and Identification Vendors. Microsoft (17%) is the top vendor for company purchases of Authentication and Identification products and services for access from outside the enterprise. Check Point Software (10%) is second. Note, 12% say Authentication and Identification is part of their Enterprise Security System.


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(9F) Question Asked: Which of the following Authentication and Identification software vendors is gaining market share in your company this year? Microsoft 15%It is part of our Enterprise Security System 9%Check Point Software 8%RSA Security 8%Verisign 8%Netegrity 5%Novell 4%Veritas 3%Critical Path 1%Entrust 1%Internet Security 1%iPAS 1%Radware 1%CloudMark 0%Oblix 0%We do not plan on purchasing any Authentication and Identification software this year

30%

Other 7%

Authentication and Identification Market Share Gainers. Respondents also chose Microsoft (15%) as the top Authentication and Identification software vendor that is gaining market share in their company this year. Check Point Software (8%), RSA Security (8%) and Verisign (8%) all tied for second.


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Appendix A

(1A) Question Asked: Why is your company planning to spend more on software in 2005 than in 2004?

Growth/New Employees 17%To Improve Productivity 15%New Features 9%Need-Based/Delayed 8%New Hardware/Equipment Which Requires New Software 7%To Improve Security 6%Consolidation/Integration 4%New/Special Project 4%Regulatory Requirements (e.g., SOX, HIPPA, etc.) 4%To Continue Service/Support 3%General Upgrade/Other 23%

Sample of Alliance Member Responses:

(a) Growth/New Employees (17%)

EGA4355 writes, “We are increasing the number of employees so we need to install new software licenses for them; we are also introducing new services (e.g. new proxy server)."

P.S5630 writes, “Requirements of corporate growth: new employees = new license requirements; additional size requires better standardization and control (via standard/integrated tools)."

KIN3098 writes, “Our business is growing. We are a software development company ourselves, and we're buying development tools mainly."

JJH8606 writes, “Growth, replacement of legacy systems, Storage demands."

TIM9128 writes, “Due to growth and replacement/update of enterprise systems."

(b) To Improve Productivity (15%)

ALU3836 writes, “We haven't made a major software capital expenditure since 2000 and there are some new products that would improve our productivity and profitability."

NON4028 writes, “Update software for more effective use and modernize system."

RIC2681 writes, “New release of productivity software."

CRA0134 writes, “Improve client management."Copyright ©2005 ChangeWave Research

All rights reserved.17


(c) New Features (9%)

CRA6356 writes, “Want improved capabilities, especially VOIP and Video conferencing at the PC level to improve efficiency."

SCH6474 writes, “New services/capabilities being added."

SEE1464 writes, “Moving to web based technology."

WIL8533 writes, “Migrating to MS Sharepoint portal and web services."

(d) Need-Based/Delayed (8%)

HAK3609 writes, “Delayed purchasing over last two years."

GHI7250 writes, “Deferred the upgrades longer than we should have. Must do."

TOM8362 writes, “Because we fell behind in purchases in 2003 & 2004 (mostly upgrades)."

(e) New Hardware/Equipment Which Requires New Software (7%)

CAR7249 writes, “Upgrading the computers entails new software."

RZE4206 writes, “Our company is focusing on the BPO business, and will require outlay for new infrastructure to run BPO. New infrastructure includes not only servers, network equipment, but also new expenditures in enterprise software such as SAP Netweaver products."

HEA7578 writes, “Hardware refresh plus upgrades to and new database and application software."

(f) To Improve Security (6%)

SHU6149 writes, “Security has become a big concern in the company after several viruses wiping out data."

VRO2791 writes, “Security and SOX compliance. Also some additional growth."

GUS7765 writes, “Perimeter Firewalls and anti-virus software."

(g) Consolidation/Integration (4%)

CHA2626 writes, “Company is trying to standardize on core applications after mergers created significant software diversity."

PET6908 writes, “To consolidate different EBS systems to one."

(h) New/Special Project (4%)Copyright ©2005 ChangeWave Research



MDW4537 writes, “New ERP and Portal Project."

MCB1345 writes, “Additional projects being added."

(i) Regulatory Requirements (e.g., SOX, HIPPA, etc.) (4%)

MEI0678 writes, “Sarbanes-Oxley requirements."

WPW6938 writes, “Need to upgrade billing software and database management (specialized integrated software) as well as security because of HIPAA requirements. Currently evaluating several products."

(j) To Continue Service/Support (3%)

WSU8151 writes, “Large national firm bought out our local software provider and forced me to upgrade due to discontinuation of service for older program."

TAX7064 writes, “One of our critical programs is reaching the end of it's support date, and must be upgraded to continue support. Basically on a must need basis."

(k) General Upgrade/Other (23%)

NBE1894 writes, “Upgrade of standard operating platforms throughout organization Continued implementation of enhanced reporting functions for SAP Server upgrades throughout organization Replacement of antiquated hardware driving specialized instrumentation Network security."

SAD2732 writes, “Upgrade of CRM systems."

THU5625 writes, “New Customer Management Software and customization... more."


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Appendix B

(2D) Question Asked: How satisfied is your company with the following vendors? (Please rate only those that your company has previously purchased products from or had experiences with)

Satisfied Unsatisfied Very Satisfied

Somewhat Satisfied

Somewhat Unsatisfied

Very Unsatisfied

Microstrategy (MSTR)

84% 16% 13% 71% 16% 0%

Agile Software (AGIL)

80% 20% 24% 56% 16% 4%

Hyperion Solutions (HYSL)

78% 22% 26% 52% 19% 3%

TIBCO Software (TIBX)

78% 23% 15% 63% 19% 4%

Ascential (ASCL) 77% 23% 15% 62% 15% 8%Webmethods Inc (WEBM)

77% 22% 19% 58% 16% 6%

Cognos (COGN) 71% 29% 23% 48% 25% 4%Business Objects SA (BOBJ)

70% 30% 15% 55% 20% 10%

FileNet Corp (FILE)

69% 31% 21% 48% 21% 10%

Manhattan Associates (MANH)

69% 31% 23% 46% 31% 0%

Retek (RETK) 69% 31% 15% 54% 31% 0%Ariba (ARBA) 65% 35% 16% 49% 30% 5%JDA Software (JDAS)

65% 35% 13% 52% 26% 9%

SalesForce.com (CRM)

64% 34% 12% 52% 28% 8%

Manugistics Group (MANU)

62% 38% 8% 54% 21% 17%

Broadvision (BVSN)

60% 39% 14% 46% 32% 7%

MatrixOne (MONE)

59% 42% 17% 42% 42% 0%

Vignette (VIGN) 50% 50% 8% 42% 50% 0%Progress Software (PRGS)

47% 53% 18% 29% 41% 12%


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(3) Question Asked: From the above list of vendors, which one would you say your company has been most satisfied with, and which one have you been least satisfied with? Please mention why.


(a) Microstrategy (MSTR)

Most Satisfied (84%):

SAN3764 writes, "Microstrategy - Good tech support."

JRO4419 writes, "Microstrategy - Good service & knowledgeable reps."

Least Satisfied (16%):

INT8321 writes, “Microstrategy - Not responsive to client’s needs and follow up."

DIC3150 writes, "Microstrategy - But we are still very satisfied. We do not use many of these technologies - the company has many home-made solutions on our own infrastructure products."

(b) Agile Software (AGIL)


KEE6958 writes, "Agile, Hyperion and JDA Software - Very reliable."

STE5236 writes, "Agile - Good GUI interface, windows based."

INT8321 writes, "Agile -Quality product, customer needs orientated service."

(c) Hyperion Solutions (HYSL)


WOL6779 writes, "Hyperion - Helping company put together strategic financial reporting."

PPI3422 writes, "Hyperion - Great customer service. They resolve conflicts quickly."

DRJ5952 writes, "Hyperion - Best technology."

STQ5468 writes, "Hyperion - Financial modeling software was a good solution for our European business."

Least Satisfied (22%):Copyright ©2005 ChangeWave Research



TOM3098 writes, "Hyperion Solutions – Complicated."

(d) TIBCO Software (TIBX)


MEA8219 writes, "TIBCO - We have a good working relationship with them including reseller arrangement."

UMA2836 writes, "TIBCO - High performance software."

HYD5819 writes, "TIBCO - Market application more specific."

LAR5995 writes, "TIBCO - Partnering on sales activities."

(e) Ascential (ASCL)


LIM2834 writes, "Ascential - With their takeover of Mercator, they melded several pieces of software under a single umbrella. Now that Ascential is being taken over by IBM the same story is true again. "


SCH0777 writes, "Ascential - Poor tech support."

(f) Webmethods Inc (WEBM)


JJH8606 writes, "Webmethods - Has provided service to specs."

FRA1147 writes, "Webmethods - Really well thought out software which addresses our needs."

EWI0296 writes, "Webmethods - Most sophisticated software."

WES2802 writes, " Webmethods - Quick response times."


KEE6958 writes, "Webmethods - Problematic software."

(g) Cognos (COGN)


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BSC1026 writes, "Cognos - Powerful and easy to use."

HAM5839 writes, "Cognos - Service levels."

TRA3972 writes, "Cognos - Completeness of business vision and software offering."

RON3950 writes, "Cognos - Satisfies company’s requirement.”

KRI9358 writes, "Cognos - Customer oriented & very flexible."

BOB8973 writes, "Cognos - Because of ease of use and capabilities of reporting."

JGA2912 writes, "Cognos - It actually works, though it requires some effort."

ZAT4071 writes, "Cognos – Versatility."

KWA0648 writes, "Cognos - Has been very reliable."

KAB3934 writes, "Cognos - Applications ability for our needs."


BMA7440 writes, "Cognos - Patch did not work after spending 100 hrs with support."

STQ5468 writes, "Cognos - Too pricey, forcing the company to move to a cheaper, less attractive reporting product."

TER6654 writes, "Cognos - Sales claims always seem to be far in excess of actual capabilities.”

(h) Business Objects SA (BOBJ)


DEL5816 writes, "Business Objects - Reporting tool equipped with the necessary functionalities."

JIM3293 writes, "Business Objects – Because we have had no problems."

DIC3150 writes, "Business Objects - We run the majority of our reports using this technology and it works well for us."

PCM1964 writes, "Business Objects - For ease of use by non technical people."




CHA768| writes, "Business Objects is too complex for most business users to use effectively right away. There is a steep learning curve for many people."

TFW6544 writes, "Business Objects - Not good follow through."

(i) FileNet Corp (FILE)


UP20999 writes, "FileNet - We use the software for work distribution."

KEN7788 writes, "FileNet - Responsive, cost-effective."

TER6654 writes, "FileNet - Decent service and back up."

SCH0777 writes, "File Net - Excellent tech support.”


KRS2506 writes, "FileNet - While their imaging software is used by very large companies who find success in their projects, we have had nothing but failures and are replacing our imaging systems completely. It seems that too much flexibility and capabilities makes it too difficult for lay IT people (non-programmers) to assist with implementation and rollout."

(j) Manhattan Associates (MANH)


MRB8653 writes, "Manhattan Associates - Has the customer support as well as quality of product.”

NPA2723 writes, " Manhattan Associates - Satisfy 99% of our requirements. Light on the ground in support & product maturity."

DWG6310 writes, “Manhattan Associates - Because of how well their products integrate."

WIL5808 writes, “Manhattan Associates - Software performs the basic function we bought it for."


WIL5808 writes, “Manhattan Associates - Does not provide timely updates and changes."

(k) Retek (RETK)*


BMA7440 writes, "Retek - As they have now merged with Oracle."Copyright ©2005 ChangeWave Research




TRA3972 writes, "Oracle - Licensing models are too complex and software offerings are disjointed."

JJH8606 writes, "Oracle - Has been the most difficult to work with, and customer unfriendly."

* Note that Oracle announced plans to acquire Retek during late March 2005.

(l) Ariba (ARBA)


WAV0101 writes, "Ariba - Performs well."

PHO0210 writes, "Ariba - They make a quality product."

LDU2089 writes, "Ariba - Interesting new products and advertising."

STE3218 writes, "Ariba - Most responsive to needs when they arise."


HAM5839 writes, “Ariba - Less follow ups and below average servicing."

INF4493 writes, "Ariba - Length of processing."

BOS1897 writes, "Ariba - Not enough customer support."

JAY7683 writes, "Ariba - Delivered less than it promised in our application."

KWA0648 writes, "Ariba - Didn't live up to expectations."

(m) JDA Software (JDAS)


2104530 writes, "JDA Software and SalesForce.com."


RAJ0075 writes, "JDA Software - Support resource is an issue."(n) SalesForce.com (CRM)


BST4747 writes, "SalesForce.com - Easy to customize, good CFA functionality."


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KRS2506 writes, "SalesForce.com - Has been very easy to work with and their product delivers exactly the capability they say it does."

RAK7868 writes, "SalesForce.com - Very good portal for sales and customer relationship management."

GJT6231 writes, "SalesForce.com - Management reporting."

TFW6544 writes, "Sales Force.com - Good customer service."


JRO4419 writes, "SalesForce.com - Unsatisfactory results and follow-up."

ZAT4071 writes, "SalesForce.com – Quality."

MAJ8457 writes, "SalesForce.com - It is just so difficult to get basic info from system."

XIE2585 writes, "Siebel, SalesForce.com - System very slow and no Word type functions such as copy/paste."

(o) Manugistics Group (MANU)


MRU3341 writes, "Manugistics - Interface well with SAP."

CHA2626 writes, "Manugistics and Logility - For the implementation of an integrated supply chain and forecasting system that has been successful in its roll-outs in many parts of the world."


LIM2834 writes, "Manugistics - No real progress in their product line."

ZAL8484 writes, "Manugistics - Their products don't upsize well."

LAR5995 writes, "Manugistics - Contractual issues."

(p) Broadvision (BVSN)


JAY7683 writes, "Broadvision - Simplifies our use of the web."




PCM1964 writes, "Broadvision - Old technology and expensive."

EWI0296 writes, "Broadvision - Architecture limited."

(q) MatrixOne (MONE)


STE2593 writes, "MatrixOne - Good support."


JIM3293 writes, "MatrixOne - Because there have been a few problems."

STE2593 writes, "MatrixOne - Need to call support."

STE5236 writes, "MatrixOne - Not intuitive for user."

(r) Vignette (VIGN)


TOM3098 writes, "Vignette - Application is easy."


SAN3764 writes, "Vignette - Weak tech support."

(s) Progress Software (PRGS)

Most Satisfied (47%): THE6962 writes, "Only use progress."


PPI3422 writes, "Progress Software - Help from customer service was slow."


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Appendix C

(5A) Question Asked: What is the primary reason your company purchased or plans to purchase Email Management Software? (Please name specific vendor you chose or are considering.)

Regulatory Requirements 41%Increase/Upgrade Performance 27%Backup/Recovery/Storage 10%Marketing Purposes 5%Spam 5%Don’t Know/Other 15%


(a) Regulatory Requirements (41%)

CA_2935 writes, "Sarbanes / Oxley."

LIM2834 writes, "IronMail, as part of the regulatory issues we examined and trialed several different vendors before making a final decision."

VRO2791 writes, "To maintain the necessary approved compliance once we register with the SEC."

ROD0138 writes, "Sarbanes-Oxley is the reason. We plan to make any future purchases from Microsoft."

WPW6938 writes, "HIPAA regulations - considering Verisign."

(b) Increase/Upgrade Performance (27%)

GRE3675 writes, "Upgrade - Lotus Notes."

BMA7440 writes, "Tumbleweeds great always increasing and up to date software."

HEA7578 writes, "Hardware and network software upgrades and migration to Windows 2003 & centralized email."

CHR4881 writes, "More email. Need to organize it better and search it faster."

HYD5819 writes, "Getting rid of all Microsoft products and Intel based hardware soon."

(c) Backup/Recovery/Storage (10%)

EGA4355 writes, "We purchased Veritas software to backup and restore our mail servers at e-mail level."


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RBW5846 writes, "Litigation Support – EMC."

(d) Marketing Purposes (5%)

GUG7607 writes, "Web mail marketing."

JON7940 writes, "We may have a new business offering modeled around delivery of information via e-mail. We have not yet identified a vendor."

(e) Spam (5%)

WOL6779 writes, "Too much spam."

(f) Don’t Know/Other (15%)

HJB3376 writes, "Blackberry - write own software to view attachments."

INT8286 writes, "Not considering it at the moment. We have as a second level priority the testing of several products. The selection evaluation is on-going."


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Appendix D

(8C) Question Asked: What was the last crisis your company faced that required an immediate purchase of security software (i.e., within 60 days)? What type of software did you purchase and who was the vendor? (n = 63)

Norton/Symantec 28%McAfee 8%Microsoft 5%Checkpoint 5%Trend Micro 5%Other Vendor 13%No Vendor Named 37%


(a) Norton/Symantec (28%)

STE3218 writes, "Antivirus and spyware; Started with freeware and then purchased Symantec."

AAA9036 writes, "Fully infected PC requiring complete rebuild; Bought Norton’s together with use of Adaware, Spybot..."

JOH2803 writes, "Norton AntiVirus; Virus from an e-mail attachment from a friend who didn't realize the source computer was infected."

WPW6938 writes, "Office computer infection with several worms/trojans. Purchased and installed Symantec software (Norton Systemworks Premier)."

ARR2905 writes, "Virus attacked pc's; bought Norton 2005."

GRE7940 writes, "Virus infected machine/network. Norton Systemworks."

(b) McAfee (8%)

ROD0138 writes, "McAfee Security Center, to protect against a worm written in Visual Basic."

PIN5840 writes, "Virus penetrated mainframe + servers; McAfee purchased due to low-bid [over objection from security IT guys who pushed for Norton/Symantec]."

(c) Microsoft (5%)

PMK2584 writes, "Microsoft spyware."

MAC0901 writes, "Operating system malfunction; Purchased Microsoft Windows XP to replace oem version that was deficient."


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(d) Checkpoint (5%)

CTO0987 writes, "Virus attacks; Checkpoint Firewall."

(e) Trend Micro (5%)

TAY3944 writes, "Server-based network anti-virus suite with spam filtering for Exchange Server; Trend Micro Client/Server/Messaging Suite for SMB."

JEF4202 writes, "Spyware invasion on notebooks; Trend-Micro PC-cillin Internet Security was purchased."

(f) Other Vendor (13%)

KAB3934 writes, "Not so much a crisis as a need to filter incoming emails; Frontbridge is providing that service for us."

KRS2506 writes, "Virus/Worm … infected many servers and PC's thus shutting our network down. The Virus software we use did not catch this SQL Worm; We purchased and installed Cisco Security Agent (CSA) to solve this problem."

TED9840 writes, "Last crisis was early January when someone thought our servers were being uses to spam other email accounts; we changed from a Comcast server to AT&T."

CVI5052 writes, "No crisis in 60 days. We did upgrade our firewall to increase security and provide better remote access; Fortinet firewall and VPN."

(g) No Vendor Named (37%)

CHA2626 writes, "Discovered hackers in hotel across the street on our wireless network. Changed wireless encryption from LEAP to EAP Fast."

SAU3923 writes, "Our client company being a big company already had strong anti virus policies. Our latest crisis was Malware and Spam. Company is purchasing more anti Spam software at the corporate server level."


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III. ChangeWave Research Methodology This report presents the findings of the latest ChangeWave Alliance survey on corporate IT purchasing of security and software. The survey was conducted between March 30 - April 1, 2005. A total of 554 Alliance members participated.

The Alliance’s proprietary research and business intelligence gathering system is based upon the systematic gathering of valuable business and investment information directly over the Internet from accredited members.

ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, interprets and reconciles the information in a cohesive manner and converts the information into valuable quantitative and qualitative reports. The Alliance has assembled its membership team from senior technology and business executives in leading companies of select industries. Nearly 3 out of every 5 members (58%) have advanced degrees (e.g., Master’s or Ph.D.) and 94% have at least a four-year bachelor’s degree.

The business and investment intelligence provided by the Alliance provides a real-time view of companies, technologies and business trends in key market sectors, along with an in-depth perspective of the macro economy – well in advance of other available sources.


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IV. About ChangeWave Research

ChangeWave Research, a subsidiary of Phillips Investment Resources, LLC, identifies and quantifies "change" in industries and companies through surveying a network of thousands of business executives and professionals working in more than 20 industries. ChangeWave has a very unique asset in its 5,000-member Alliance. We have assembled our membership team from a broad cross section of more than 20 vertical markets such as telecom, semiconductors, data storage, and biotechnology, along with a wide range of professional disciplines including CIOs, IT managers and programmers, executive management, scientists, engineers and sales personnel. The ChangeWave Alliance is composed of senior technology and business executives in leading companies - credentialed professionals who spend their everyday lives working on the frontline of technological change. This proprietary research and business intelligence gathering system provides a real-time view of companies, technologies and business trends in key market sectors along with an in-depth perspective of the macro economy - well in advance of other available sources. ChangeWave surveys its 5,000 Alliance members on a wide range of investment research topics and converts the findings into valuable investment and business intelligence reports. ChangeWave delivers its products and services on the Web at www.ChangeWave.com. ChangeWave Research does not make any warranties, express or implied, as to results to be obtained from using the information in this report. Investors should obtain individual financial advice based on their own particular circumstances before making any investment decisions based upon information in this report.

For More Information:

ChangeWave Research Telephone: 301-279-42009420 Key West Avenue Fax: 301-610-5206Rockville, MD 20850 www.ChangeWave.comUSA [email protected]

Helping You Profit From A Rapidly Changing World ™www.ChangeWave.com


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