Financial convergence.

A wave of earnings warnings from major enterprise software providers such as People-Soft and Veritas, analyst downgrades in the semiconductor stocks, including Merrill Lynch's lowered opinion of mighty Intel, and cash-rich Microsoft Corp. talking about cutting $1 billion in spending have all combined to sow unease regarding the strength of U.S. technology spending. IT executives are quite justified in thinking there is little wisdom in building out new applications until they have a firm foundation. In addition, the upcoming Service Pack 2 release from Microsoft for the XP operating system is focused on security and offers little in new nonsecurity capabilities. Microsoft's stance of trying to fix security problems before moving forward could be a metaphor for the tech industry at large. Salesforce.com Chairman and CEO Marc Benioff was the first person, or at least the loudest, to champion the end of packaged software and the rise of services. Benioff's declaration that the era of bigbang ERP and CRM projects is coming to an end is proving correct. Customers want to subscribe to software as a service and pay as the service is used rather than upfront, as the service is promised.