The Software Industry Could Learn a Thing or Two From GM

I’ve been reading a lot about General Motor’s bankruptcy filing the past few days, which got me thinking.

GM, among others, became notorious for “over-productizing” their businesses with too many competing brands, and probably would have been financially healthier if they had shed underperforming properties earlier. In that context, there’s a lot of similarities that can be drawn between the American automotive and software industry.

The continued emergence of SaaS and software applications acting as platforms on which businesses can extend the software into new capabilities is going to lead vendors to reevaluate their delivery models and the number and types of software products they offer. Sugar offers one, single type of application, yet we have customers leveraging it for manufacturing, PRM, and even in support of finance and billing.

We’ve seen this same trend in the software sector for years, with some of the larger, old-school vendors running large, inefficient business models that offer underperforming “add-on” products that customers should be able to bolt on if and when they choose to. I expect the economy and cost-cutting to only expedite the move towards more efficient, and more consolidated, software packages and offerings.