When you trap 2,000 of the software industry's most powerful, promising, engaging and controversial executives in one convention center, you're bound to make headlines. Software 2007 did just that. Taking place on May 8 and 9, the conference attracted the largest multinationals, the smallest upstarts and a sampling of every type of member of the software ecosystem in between.

The atmosphere was optimistic and upbeat. The networking floors were crowded with CEOs, investors, vendors and press. The theme, "Powered by Innovation" kept presenters focused on the future and the host of next-generation technologies and business models which will drive the software industry forward.

SAP chairman Hasso Plattner took the stage on the first morning looking like the visiting Stanford professor he is. Plattner revealed more about the company's secret, next-generation product, code named A1S.

Plattner implied that enterprise software needed a "YouTube jolt" to improve its success and predicted "Google speed" for information access in the future. (Despite his enthusiasm, an SAP executive later told Dan Farber that the product wouldn't really include all of the features discussed in the keynote.)

Steve Ballmer spoke as if he were the industry's pumped-up basketball coach taking his team into a game they weren't quite prepared for. Speaking to a packed house, the Microsoft CEO pledged Office 2007 would deliver a new set of business advantages to its customers and said that Silverlight would be the most exciting product to come from Redmond this year.

The unique vendor-neutral nature of Software 2007 meant that Plattner and Ballmer were far from preaching to the converted. The audience was filled with emerging startups hoping to steal their lunch.

The most vocal upstart - as usual - was Salesforce.com's Marc Benioff. He preached about his company as an "agent of change" in the industry, and led the charge for the cadre of software-as-a-service vendors in attendance.

Benioff and others spent a good deal of time taking shots at Oracle - an easy target since the company did not have a presence at the show and CEO Larry Ellison is taking three months off to sail the America's Cup in Spain.

"Salesforce is like a marriage. Oracle is more like a one night stand," said Benioff. "We offer a much more intimate relationship - we live with our customers every day." (Read a summary of the best quotes from the conference in the SandHill.com Blog.)

Fresh from a victory in his battle with investor Carl Icahn, Motorola CEO Ed Zander took the keynote podium to remind software vendors of the industry's mobile future. Zander said the company will introduce a movie-playing mobile phone at an event next week.

Both HP's Shane Robison and EMC's Jeff Nick spoke of their recent transformation into software companies.

And Ken Berryman of McKinsey & Co. shared findings from a new report, State of the Software Industry 2007, which underscored the importance of innovation to vendor success.

More than 100 press, analysts and bloggers attended the conference, producing significant coverage of all the keynotes and breakout sessions.

The blogging community was pleased with the event: "Much bigger and better than last year…" "Quite honestly, this is the most interesting conference agenda I have seen in quite a while…" "I don't normally enjoy keynotes, but found this one fascinating …"

Satyam exec and blogger S. Sadagopan summarized the atmosphere well: " Optimism and growth sentiments were palpable throughout the Software 2007 meet…"

Sadagopan also posted his perspective on SAP's acquisition of OutlookSoft, which was announced this week. Microsoft also announced that it bought a minority stake in CareerBuilder.com (read all software M&A news).

Software M&A continues to proceed at record levels, with first quarter levels exceeding $13 billion and technology LBOs on track for another record year. First quarter software VC investment also exceeded $1 billion. See charts of all the first quarter M&A and VC totals in the SandHill.com Blog on Software Finance.

SandHill.com blogger and Software 2007 attendee Tony Baer of onStrategies took a moment to compare the conference with JavaOne. The Sun show also took place this week but without many big announcements, although one expert says Java's security flaws persist.

Noted & Quoted
Gartner says virtualization is an expensive experiment today; Novell's chief Linux desktop architect has left for Google; and TheFunded.com, a new site which allows entrepreneurs to rate their venture capitalists, says InterWest Partners is the no. 1 rated VC worldwide.

"We are really looking at the beginning of the next big tech cycle."
- M.R. Rangaswami, co-founder of Sand Hill Group, on the next phase of the software industry