Analysis update
Lawson, for example, has successfully
targeted industries such as healthcare,
Paul D Hamerman: “Customers expect
food, and fashion. Other vendors (e.g.,
deeper industry expertise from their ERP
Microsoft, Epicor, and Sage) may choose software providers to gain a more integrated
to go further down market to elude the
application environment and end-to-end
mega-vendors in targeted industries,
process automation.”
often relying on partners to add the last
mile of specialisation. which is reflected in its current Microsoft
Dynamics releases.
Specialists focus on fewer or even single
verticals – Industry-specific vendors may Business process flexibility – By
not be considered within the scope of embedding graphical business process
the ERP market when they serve a single management technology within the
industry or do not provide the core application, customers are able to define
accounting functionality that is at the heart the precise workflows and application
of ERP systems. Nevertheless, these integration scenarios required to carry out
specialised plays are often compelling a business task. SAP designed business
to customers and may also attract the reliable maintenance stream, now process orchestration into its Business
attention of ERP vendors looking to partner accounting for half of the market's ByDesign solution from the outset. Oracle
or acquire. Specialist vendors offering revenue. Oracle and Infor have made this has been proactive in using business
comprehensive suites to particular play multiple times, acquiring mature process scenarios to orchestrate cross-
verticals include Deltek (project-based companies with strong customer bases. application integration with AIA.
businesses), Blackbaud (not-for-profits), As the market evolves, SaaS subscription
Mincom (mining and asset-intensive revenue is likely to become increasingly Embedded business intelligence – Rather
businesses), QAD (manufacturing), and attractive as a recurring stream, putting than having to leave the application and
IBS (distribution). CGI Group gives ERP targets on SaaS pure plays such as launch separate reporting and analytics
vendors stiff competition in government, NetSuite and Intacct. tools, ERP applications are moving toward
including US federal as well as state and embedding analytics within the context
local governments. Specialists solidly To eliminate competitors – Though of the application itself. This can be
dominate the lucrative healthcare market, relatively rare, this aggressive acquisition seen in a number of products including
particularly patient systems. Notable play has been done. Despite a landmark Epicor 9 and the yet-to-be released
players include Cerner, Eclipsys, Epic antitrust case that brought close Oracle Fusion Applications.
Systems, McKesson, and Siemens. government scrutiny, Oracle prevailed in
its hostile takeover of PeopleSoft and
continues to support and enhance this Force 4: SaaS avoids upgrade
Force 2: Vendor consolidation adds successful ERP product. challenges
stability and breadth Virtually all on-premise ERP vendors have
As long-term observers of software a strategy to deliver a SaaS offering, if
markets, we are confident that acquisitions Force 3: Technology innovation they do not already have one in play. SAP,
will continue in enterprise applications. In adds flexibility and usability for example, offers Business ByDesign,
fact, it is inevitable. The leading acquirers Historically difficult to use, ERP which is still in a ramp-up mode. Oracle
have been Oracle, Infor, and Sage (see applications are undergoing a major shift is considering a SaaS option with Fusion.
Figure 5). Microsoft has been inactive in usability and configurability. These Epicor has indicated that its Epicor 9
since its acquisitions of Great Plains changes are consistent with Forrester’s platform is SaaS-ready. Fujitsu’s Glovia
Software and Navision several years ago, 2007 vision of Dynamic Business has a SaaS ERP offering called GS
but it certainly has the financial strength Applications, where the applications Innovate. More are in the works.
to shake up the market. The effects of the are benefiting from a convergence of Upgrades, we believe, are the central
economic downturn have left several ERP technologies that provides (inter alia): tipping point leading to more interest
vendors with substantially lower market in SaaS. Under the SaaS model, the
capitalisations, making them easier targets Role-based user experiences – Pre-built application is managed by the vendor,
for acquirers. In addition, strategic acquisi- roles within the system are designed which will provide software updates to
tions build pathways into new markets. with increasing levels of granularity all customers on the same schedule. circlesolid
Looking forward, the reasons why ERP based on personas that define the
vendors may acquire or be acquired include: actions and tasks typically carried out
by business personnel. The roles can be
To boost profitable recurring revenues – further configured to the responsibilities
As discussed earlier, recurring revenues of specific individuals. Microsoft has
from maintenance is a profitable and been a leader in role-based ERP design,
www.logisticsit.com
MANUFACTURING
December 2009 &LOGISTICSIT
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