What's next for ERP?
The ERP landscape became simpler this week, when SSA was swallowed up by a private equity company called Golden Gate Capital. This group (and its subsidiary Extensity) has now absorbed Baan, Comshare, Dun & Bradstreet Software, Epiphany, Infinium, Marcam and Systems Union. As Ventana points out this means that the choice boils down to SAP, Oracle, Microsoft and this new amalgam under GoldenGate/Extensity. It is interesting that this private equity group seems to be performing the role CA used to play: hoover up under-performing companies, slim them down and milk the support revenue stream. What the article implies is that this is pretty much the endgame for the ERP space, but I am not so sure. The one dimension missing here is the hosted model.
Salesforce.com showed what could be done with a hosted software model. In the ERP world we are seeing new entrants like Intacct and Ataoi, which while they are small so far are making solid inroads into their chosen markets. At present this approach may appeal more to SMEs, but remember that salesforce.com started this way as well, only later taking on Siebel more directly. I know the CEO of one of these emerging hosted ERP vendors, who was amused to be in a competitive bid with SAP at one prospect. His company’ bid was less than one-tenth that of the behemoth. I’m not suggesting that these hosted ERP systems compare in functionality with SAP and Oracle, but perhaps that after all is the point. Traditional ERP systems have become so bloated that large parts of them remain unused and having systems hosted avoids all the environmental installation problems that ensure with traditionally installed software, where there are so many combinations of operating system, DBMS, transaction monitor etc that the vendors have to spend as much time testing combinations of software than actually writing new functionality.
It may take some time but I think the next change in the ERP market will be via this hosted model. When you start to see defensive market offerings by the giant vendors, just as Siebel started an on-demand offering (but too late), then we will know that this prediction has been fulfilled.
Salesforce.com showed what could be done with a hosted software model. In the ERP world we are seeing new entrants like Intacct and Ataoi, which while they are small so far are making solid inroads into their chosen markets. At present this approach may appeal more to SMEs, but remember that salesforce.com started this way as well, only later taking on Siebel more directly. I know the CEO of one of these emerging hosted ERP vendors, who was amused to be in a competitive bid with SAP at one prospect. His company’ bid was less than one-tenth that of the behemoth. I’m not suggesting that these hosted ERP systems compare in functionality with SAP and Oracle, but perhaps that after all is the point. Traditional ERP systems have become so bloated that large parts of them remain unused and having systems hosted avoids all the environmental installation problems that ensure with traditionally installed software, where there are so many combinations of operating system, DBMS, transaction monitor etc that the vendors have to spend as much time testing combinations of software than actually writing new functionality.
It may take some time but I think the next change in the ERP market will be via this hosted model. When you start to see defensive market offerings by the giant vendors, just as Siebel started an on-demand offering (but too late), then we will know that this prediction has been fulfilled.
posted by Andy Hayler at 7/07/2006 04:22:00 AM
1 Comments:
Smaller more specialized ERP’s will defiantly make inroads with small\midsized companies. Companies like ours can offer much better value for your dollar yet be flexible enough to add features at moments notice. I don’t any serious company would go with a web based ERP, what if you have a billing dispute? You need full and final say over you data.. That means having it on site.
Sammy A.
XPErp.com
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