Competition Increasing in ERP - A Good Development
My good friend Vinnie Mirchandani, the author of Deal Architect (www.dealarchitect.typepad.com), and I were comparing software market tidbits out by Midway Airport last week.
One of things we discussed was Compiere's recent $6 million venture raise. Compiere is an open source provider of ERP software. Given its open source architecture, its solutions should be less expensive to own and operate. That is, Compiere should be a low TCO product.
I first learned of Compiere at one of MR Rangaswami's Software shows. While I wondered whether the world needed another ERP vendor at the time, subsequent market consolidation in this space would indicate that another player or two are needed to provide options and low pricing to software buyers.
I also spoke with the President of Agresso North America, Shelley Zapp, last week. It was a great call and I heard how Agresso is planning to aggressively (no pun intended) penetrate the North American market. Agresso will go after service industries here and promote their post-implementation flexibility. That flexibility capability is something that should resonate well with ERP users everywhere who find themselves shackled to products that promised infinite pre-implementation flexibility but offered little or no post-implementation change options.
Workday is another emerging ERP vendor. While I've had the pleasure of visiting the A-team that Dave Duffield has assembled, I cannot discuss their product plans due to NDA. I will say that I have relatively optimistic expectations of this group.
All in all, competition is increasing for ERP software and the timing is good for everyone. We can expect a growing number of ERP replacement deals in the coming years as those companies that bought ERP to mitigate Y2K concerns may start looking for new products.
We can expect competition to shape up around the following themes:
- low cost solutions - Expect MSFT, Compiere, and old school vendors to wage war here
- post-implementation flexibility - Agresso may stake this out but expect some the SOA vendors to promote this theme, too
- SOA - If vendors can translate this into business value, it might sell. Currently, Oracle and SAP are playing this card.
There will be other competitors, too. The ubiquitous "Business As Usual" will delay deal flow. But, so will BPO vendors, hosted providers and other SaaS solutions.
This looks like a fun space to watch.