CNet posted an article today.."Software Stack Wars" http://news.com.com/Softwares+stack+wars/2100-1012-6062557.html?part=dht&tag=nl.e703. The article discussed how companies like Oracle and SAP are orienting their product offering to provide the complete "stack." By "stack"...they mean everything from the operating system, to the database, to data integration engines, to business process features. 
The implication is that these companies are consolidating their markets to be a one-stop shop for everything their customers want. So is software Venture Capital Investing a threatened proposition? I want to make a couple of observations regarding this:
This shift by the Majors represents the counterswing to the best-of-breed market dynamic over the past ten years. The positioning is that best-of-breed created too many data sets that are too hard to integrate, there was no composite view of the enterprise, and it is thus time for a change. There is an element of truth to this and makes sense for applications that are long-standing where process doesn't ever really change. While this may all be a nice corporate line...the best software salesmen within the Majors will regardless prey on best-of-breed features..not the "stack."
Yes...the Majors are changing their tune from best-of-breed to "we can do it all" BUT innovative, small best-of-breed companies will not be frozen to death. Business Units generally drive software selection not IT when it comes to user-facing apps. except for more mundane stuff. Business Units are not going to let IT decide what is best for business. Software innovation generally comes from small, very focused companies. So best-of-breed solutions will generally derive from some place other than the one-stop shop. Every one of the companies referenced in the table above was, at its origin, the best-of-breed for something. When they lost their capacity to either manage or spark innovation beyond their core, they started buying this innovation...it is how the software world works. I believe they could get so mired in integration (e.g. Oracle) that innovation will be further stifled.
However, one-stop shops will be able to disrupt the sales process of best-of-breed software vendors. As long as a possibility exists within the mind of the Business Unit that the one-stop-shop might have a solution...then they become the competition because they are allowed to be drawn into the sales process even though they may not have any relevant competence. BUT since they are putting themselves into position to become the monolithic data repository...then they may get into position to sell the customer that one-stop-shop should be hired to customize to the customer's needs so as to maintain system integrity. THEN...if they hear the request enough times from the market via this disguised form of market research...they can go build the software knowing there is a market for it. This potential for invasiveness does negatively impact the venture world BUT then again...it has always been there in some way shape or form.
