First quarter wasn't great for the software industry but it was especially troubling for SAP. The ERP giant's revenue for new software products dropped 33 percent while overall revenue shrank 3 percent.

The results were worse than analysts had expected and underscore SAP's challenge adapt to next generation software models. SAP's 2007 small business offering, Business ByDesign is used by only 40 percent of its customers.

SAP's competition continues to intensify. The Wall Street Journal reports Oracle is planning seven new SaaS offerings that will be announced in the coming weeks. And upstart SaaS HR vendor Workday landed a $75 million venture round despite the challenging funding environment.

SAP's overall first quarter sales were buttressed by its maintenance revenue - but Salesforce.com CEO Marc Benioff says those days are numbered. In an internal email, Benioff called the maintenance fees paid to traditional vendors "tolls on the road to nowhere."

As the Enterprise Cloud Summit at Interop took place in Las Vegas this week, the movement gained significant traction: Microsoft signed a $3 billion deal with HP/EDS to resell its products.

Nasscom slammed the U.S. H-1B visa legislation saying it restricted the ability of Indian companies to compete in the U.S. market. The recession is taking a toll on India's offshoring business, including layoffs in Gurgaon, east of Dehli.

Noted & Quoted

• EMC is trying to block its executive from joining HP.
• The Motley Fool looks at how IBM plans to destroy Google.
• Forrester says 60 percent of enterprises still use Internet Explorer 6 as their default browser.
• Swine flu becomes the latest blow to the Mexican offshoring business.
• New federal CIO Kundra calls for web presence, accountability.

"It was a mistakeâ€Â¦ We should have taken more time."
SAP co-CEO Leo Apotheker on the troubles with its Business ByDesign product