With 2020 hindsight and the best rear view mirror clarity (j/k), Q3 appears to be THE deflection point in where the economy began to impact the enterprise software vendors.  A flurry of continued lowered guidance on earnings by vendors reflects the general nervousness sweeping customers and prospects as we head into the most important quarter...Q4.
Major trends in Q3 include:

• Overall new license revenues down for most on-premise vendors except IFS, Intuit, JDA, and SAP, who have managed to buck the trend.  Continued drop in this leading indicator for long term growth is a troubling sign.
• Vendors continue to focus on cranking up maintenance and service revenues, though most vendors have put off any maintenance price increases.
• Vendors continue significant cost cutting with travel freezes and non-client facing expense elimination or reduction.
• Exceptions to the trend in on-premise apps license revenue decline include purpose built solutions or vendors with deep verticalization strategies.  For example, IFS' is gaining traction with its focus on micro verticals and project based businesses.  Retail's re-emergent focus on reinvesting in operations is bolstering JDA's business.
• Subscription revenue vendors (i.e. SaaS vendors and vendors with SaaS/OnDemand offerings) continue to grow at breakneck paces with Ariba (73%), Concur(72%), CA (55%), and Taleo (49.4%), leading the charge in year over year quarterly revenue growth.

Here's the break down of year over year quarterly new license sales numbers/recurring revenues:
Enterprise Software Vendors with Perpetual License Revenues (YoY)*

• CDC Software - License down 16% to $12.8M / Maintenance up 12% to $24M / Services down 15% to $21.1M
• Deltek - License down 13% to $18.5M / Maintenance up 12% to $29.3M / Services up 1% to $23.1M
• Epicor Software - License down 7% to$22.4M /Maintenance up 24.8% to $50.1M / Services up 27.1% to $41.6M
• i2- License up 0.4% to $10.6M/ Maintenance down 8.9% to $20.9M / Services flat at $33.4M
• IFS - License up 34% to SKr 142M ($17.9M) /Maintenance rose  SKr 175M ($22.1M) / Services revenue up 13.4% to SKr 287M ($36.2M)
• ILOG - License up 61% to 17.8M / Maintenance up 46% ‚
• Intuit - General revenues up 8% to $481M.  Quick Books Revenue up 6% to $152M, Payroll and payments revenue up 16% to $152M
• JDA Software - License up 48.4% to $23M/ Maintenance rose 5.9% to $46.4M / Services revenue down 18.6% to $29M
• Lawson Software - License down 17% to $21.1M/ Maintenance up 13% to $89.1M / Services down 3% to $80.7M
• Oracle (Apps) - Oracle reports Q2 FY2009 in December - will update later as they are the "first" in the cycle
• QAD - License down 7% to $13.1M / Maintenance up 1.2% to $32.7M/ Services up 8.9% to $22M
• SAP - License up 7% to 763M / Maintenance up 20% to 1.167B / Services up 11% to 748M

Enterprise Software Vendors with Subscription Revenues (YoY)*

• Ariba - Subscriptions up 73% from $18.8M to $32.6M
• CA - Subscriptions up 55% to $1.393B / Software fees down 30% to $15M / Services down 27% to $74M
• Concur - Subscriptions up 72% to $55.7M
• NetSuite - Up 44% to $40.4M
• Oracle (On Demand) - Oracle reports Q2 FY2009 in December - will update later
• Right Now - Subscriptions up 19% to $25.9M
• SAP - Subscriptions up 39% to $64M
• SalesForce.com - Subscriptions up 44% to $253.4
• Taleo - Subscriptions up 49.4% to $40.9M

The bottom line - the price wars in Q4 are real but the best deals may come in Q1.
Initial results show that SaaS vendors appear to be the main beneficiaries with customers seeking shorter term contracts (i.e. moving away from one year agreements back to the month to month model).  Try before you buy is definitely picking up.  However, early Q4 indicators from conversations with sales professionals and prospects indicate that Q4 discounting for on-premise software remains fierce and as competitive with SaaS pricing. Prospects and existing customers should take advantage of Q4 price wars but be cognizant that deals in Q1 2009 may be even better because most vendors will have exhausted their Q1 pipelines!
Your turn.
What's the best deal you are getting?  Feel free to post your comments here or send me an email at [email protected] .
* Not responsible for any math errors or erroneous revenue information.  Please read the quarterly filings yourself =)