NEW YORK, Oct. 28, 2005 -- Continued pricing pressure, overcapitalization and vendor rationalization in the enterprise software industry are combining to create an environment that will favor increased merger and acquisition activity in the remaining portion of 2005 and into next year, said Standard & Poor's in its semi-annual survey on the enterprise software industry. Noting that the pace of mergers and acquisitions in this sector may never again equal that of the boom period of the late 1990s, S&P still sees growth opportunities in the enterprise software market, particularly with respect to return on investment and total cost of ownership. These and other findings are available in the report, Computers: Software Industry Survey, published twice yearly by Standard & Poor's, a leading provider of independent investment research, ratings and indices.

Economic growth remains a key driver for the software industry overall. As of October 2005, Standard & Poor's forecast real gross domestic product growth of 3.5% for the year and 3.4% for 2006. This, and the likelihood that companies will continue to invest in new hardware and will want to leverage existing hardware infrastructures by installing upgraded and new software, bodes well for the industry.

"We anticipate sales growth in the mid-single digits for the enterprise software industry in 2005, driven by a stronger economy and a gradual loosening of IT budget purse strings," said Jonathan Rudy, an equity analyst for Standard & Poor's and author of the report. "In addition, we see significant growth opportunities in three distinct areas that continue to evolve rapidly: web services, consumer software, including video game software, and internet security. The latter includes antivirus software and firewall/VPN software."

To view a video clip of Standard & Poor's equity analyst Jonathan Rudy discussing the sector, please point your Web browser to mms://wmd31sea.activate.net/sandp/windows/sptv-rudy.wmv (viewing the video clip requires Real Player capability).

Standard & Poor's Industry Surveys provide a broad and fundamental overview of each industry's structure, its recent performance, and an analysis of trends that will influence it in the future. Each Survey is organized into the following sections: Current Environment, Industry Profile/Industry Trends, How the Industry Operates, Key Industry Ratios and Statistics, How to Analyze a Company, Industry References, Comparative Company Analysis, and a Glossary of terms used in that industry. Both text and data are provided, as are references to additional sources of industry information. Two surveys on each industry are published each year.

Readers can purchase Standard & Poor's Industry Surveys three ways:

Online for immediate download at http://sandp.ecnext.com, by telephone at 800-221-5277, or via e-mail order sent to bill_kelleher@standardandpoors.com. Members of the media can request a copy from the communications contact listed at the end of this release.

The analyst quoted above is a Standard & Poor's equity analyst. He has no affiliation with any company he covers, nor any ownership interest in any company he covers.

The equity research reports and recommendations provided by Standard & Poor's Equity Research Services are prepared separately from any other analytic activity of Standard & Poor's. In this regard, Standard & Poor's Equity Research Services has no access to non-public information received by other units of Standard & Poor's. Standard & Poor's does not trade for its own account.

About Standard & Poor's

Standard & Poor's is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With approximately 6,300 employees located in 20 countries and markets, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com.