ERP Vendors and their Products Catering to Different Verticals

During 1990, ERP market was dominated by few vendors namely SAP, BaaN, Oracle, People Soft and JD Edwards, who were also known as big five of ERP market. The market was, then, was growing at compound rate of approximately 35%. Fortune 500 companies were the major customers.

Key focus of ERP vendors, during that period, was to expand functional scope of their product and provide sharper vertical focus. Manufacturing made up for the largest segment of ERP spending.

Trend during 2000

IT spending as a whole slumped after the collapse of internet bubble and 9/11 terrorist attack,. Market for ERP also saturated for fortune 500 companies. ERP vendors started to face financial difficulties. ERP market went into an upheaval and following trend emerges:

• Increased acquisition and merger activities: Financially stronger ERP vendors started to swallow their weaker brethren. Private Equity firms also started to play a big role. BaaN was taken over by Invensys and subsequently by SSA Global.

  SSA Global was later merged with Infor, which was supported by a large private equity company. J. D. Edwards was merged People Soft which in tern was taken over by Oracle through a hostile takeover.

• Segmenting/diversifying of ERP Market: Due to saturation at top end, ERP vendors were trying to penetrate medium and small market segments.

  The market thus got segmented into tier 1 (large organization), Tier 2 (medium organizations) and tier 3 (small organization).

  Major ERP vendors started offering products for lower end of the market either through extension/rationalization of their products or through acquisition.

  ERP vendors were also diversifying their product to different verticals. Whereas, manufacturing provided the major chunk of their revenue, the focus area turned to retail, public sector, utility, financial sector, and telecom.

• Web enablement: Rising opportunity of ERP vendors was to leverage their existing products with niece acquisition, to extend beyond their earlier solutions, limited to four walls of an organization.

  The explosive development of internet made possible seamless web based collaboration by organizations with their vendors and customers, such as “mySap.com” solution from SAP and e-business suite from Oracle.

Some Key Vendors

• SAP: They are the largest ERP solution provider with more than 75.000 customers and 12 million users and holding around 30% of market share. The flagship Solution, R/3 is unmatched for its sophistication and robustness.

  R/3 software gives an option of around 1000 pre-configured business processes. This solution is available in all major currencies and languages and can be hosted on several Operating Systems and Databases.

  As mid market option, SAP has brought out, Business All in One, a solution with industry tailored configurations. SAP offering for smaller organization is SAP Business One. SAP offers a hosted solution, namely SAP Business by Design, for organizations lacking IT resources.

• Oracle: Oracle is next to SAP in ERP market breadth, depth and share. It offers a comprehensive, multilingual and multi currency solution, mostly through its channel partners.

  It is the first to implement internet computing model for developing and deploying its product.

  Oracle also took over various ERP solution providers during 2000 such as People Soft, JD Edwards, Retek (retail industry solution), and Siebel (customer relationship management software). It has taken up project Fusion (based on Service Oriented Architecture) to integrate various products, outcome of which is keenly awaited.

• Infor: Infor is of recent origin and expanded through a number of acquisitions.

  Its acquisition of SSA global during 2006 made it a forerunner as ERP solution provider.

  SSA global had two strong product lines, BPCS and BaaN. SSA also made a number of other acquisitions, such as MAPICS, Lily Software Associate and GEAC. SSA is focused on building, buying and integrating best of breed solutions.

• Microsoft Dynamics: Microsoft, which did not have an ERP portfolio, started by acquiring a host of ERP products like Navision, Solomon, Great Plain and Axapta. Excepting Axapta, which is strong in manufacturing and suitable for mid market, other products are meant for smaller organizations.

  Microsoft is much dependent on channel partners, not only for sales and consulting but also for add on development. Their solutions are closely integrated with their office suit.

Authorship/Referencing - About the Author(s)

The article is Written and Reviewed by Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.