Bruce Richardson of AMR Research has posted a polemic forecast looking at the large scale enterprise applications market in 2010. Before the SMBs switch off – this applies to you as well. I’ve known Bruce for many years and apart from being incredibly sharp to say nothing of entertaining as a speaker, he’s very well informed.
In his forecast, Bruce notes that:
SAP and Oracle customers have stopped buying applications from their ERP vendors. Instead, they contract with low-cost Indian or Eastern European integrators to build custom composite apps that sit on top of their ERP backbone.
Looking at Sage’s UK customer acquisition figures +27K first half 2005-6. Instead, new VSB customers are fleeing into the arms of the low cost SaaS providers.
Between 2010 and 2012, these same customers start to gripe that their legacy ERP systems have become bloated “understructures” that have become too expensive to maintain. CEOs threaten to withhold maintenance payments if fees aren’t sharply reduced.
Again – look at Sage’s new maintenance contract customer acquisitions – +3K first half.
At the same time, the Indian and Eastern European vendors are now offering their own “business process platforms” built around the newest development tools and technologies. They begin replacing large chunks of the ERP backbone with their own software or through business process outsourcing (BPO) products.
See what Salesforce.com is doing right now, along with the myriad of new suppliers I’ve talked about.
2010>2012 may be the time frame for large organisations, but it’s already happening in the SMB space. BTW – I’m not picking on Sage per se. They serve as a metaphor for what happens when there’s a seismic shift in the market. The same applies to Microsoft, CODA, Access, OpenAccounts, IRIS, Intentia, Hansa in the UK.
Technorati Tags: ERP, IRIS, Microsoft Business Solutions/Dynamics, CODA, SaaS, Sage_software
