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Is the Enterprise Application Market space getting polarized around Oracle and SAP?

We will get answers only with the flow of events in the next few years. While the emergence of one-stop-shop players for all enterprise applications is imminent, life is becoming difficult for niche players to maintain scale and profitability. CIOs prefer to talk to one single vendor for all the enterprise application needs. It is easy to integrate different modules from a single vendor than trying to patch-up heterogeneous applications from multiple vendors.

The emergence of the large vendors also brings the discussion to the new ASP/Hosted Services Model. Though Salesforce.com and other ASP vendors had some success in selling this model, security concerns still prevail. I am not sure how many companies are comfortable to let-go the control of their critical enterprise data to a third party.

If the future of the enterprise applications market will be controlled by big vendors, the question is who will dominate this space. No single vendor might gain absolute control over the market, though one single vendor may be able to command more mind share & premium.

I am curious to see how much successful Oracle Fusion will be. Take the case of 3 different CRM applications already owned by Oracle viz its Own, through Siebel and People soft acquisitions. Which of those redundant features will survive and which will be the ones killed is difficult to predict. . How will customers react to the integration process? What are the costs of integration and opportunity loss from the whole exercise?