Figures from Gartner Research’s most recent North American ERP market share report — which ranks the vendors through 2008 — show that doesn’t seem to be the case.
SAP’s share of the North American ERP market decreased from 28.3% in 2007 to 26.8% in 2008. In turn, Oracle’s decreased from 12.9% in 2007 to 12.7% in 2008.
SAP and Oracle are still one and two, respectively, in the North American enterprise software market by a wide margin. But in looking at these numbers, the more interesting question is, who’s taking market share from them?
According to Gartner, Sage’s ERP market share increased from 7.2% in 2007 to 7.9% in 2008. Infor stayed level year-over-year at 6.1%. And “other” vendors grew from 41.7% to 42.7%.
It’s interesting to look at the Tier 2 vendors. Panorama Consulting conducted an ERP software comparison back in March that indicated Tier 2 vendors were holding their own with Tier 1′s in terms of customer satisfaction. Customers were most satisfied with SAP, followed by Tier 2 vendors, then Microsoft and Oracle.
And as evidenced by the SaaS strategy announcements of SAP and now Oracle over the past couple of weeks, it seems on-demand vendors are now a threat as well.
Most recently, Oracle CEO Larry Ellison did a complete 180 on the SaaS-front, now boasting that in less than a decade’s time, Oracle will be the number one on-demand software vendor. It’ll sell its Fusion Applications — its new generation business suite– on-demand and on-premise.
SAP hasn’t expressed desire in such a coup. In keeping with its enterprise strategy of increasing its footprint within its installed-base, SAP will only sell on-demand software to them. For the smaller guys, it’ll sell Business ByDesign — when it’s ready.
Up until now, SAP and Oracle have been plenty profitable without a full-line of SaaS applications. But are the Tier 2 vendors’ successes in economically-troubled 2008 an indication that customers are looking for some less-expensive options?]]>
The long and short of it is this – a more than a year long, costly SAP implementation with less than ideal go-live and upset staff members.
In fact, employees are so unnerved, they’re being offered workshops in managing excessive pressure within teams, coping strategies for abnormally high workloads and dealing with difficult situations/conversations, according to the ComputerWeekly reports.
We’ve been down this route before on SAP Watch — are go-live problems the software’s fault or the businesses’ and systems integrators’ fault?
Not having the right skills on the ERP implementation team, and lack of buy-in from employees once it’s launched are the two biggest causes of ERP implementation failures, according to a Panorama Consulting Group report.
Now this isn’t a failed SAP project, but I’d think the same holds true here.
Recently, Forrester Research’s Liz Herbert did some interesting research on the challenges SAP customers are having with their systems integrators.
It’s worth pointing out that overall, companies were quite happy with systems integrators. That said, there were a few areas in which they’d like to see improvement that seem to speak to the Somerset County Council’s experience.
For one, companies want more help with change management. Companies want systems integrators to share best practices on helping people transition to these new systems. Judging from the workshop sessions Somerset County’s offering their employees, that seems particularly like an area in which they could have used some help.
But systems integrators can’t take the whole blame. Take this anecdote from “Bev,” a response to an SAP Watch blog on whether SAP certification was the right way to ensure successful SAP implementation.
“Two years ago I was approached by Managing Director (automotive parts manufacturer) to look at their SAP system that is productive for 8 years. The MD was very upset due to the endless Euros spent by IT to upgrade and build custom solutions, sick and tired of consulting partners coming and going. The bottom line was that the company continued to have high inventory and poor on time customer delivery performance (50%); therefore making too much of the wrong thing.
The usual approach by consulting partners was to come in and do some fancy add-ons, custom reports, etc.
In order to re-design, we started from scratch, two teams: a SAP expert in production (and SCM) and good manufacturing expert (not SAP). We eventually found that 50% was a SAP problem and 50% was related to good old manufacturing methods. This created the ideal synergy to optimize SAP and change manufacturing methods, then only did we make a difference.”
Changes in the business process were needed to prove the outcomes they were looking for. And that’s one way companies can ensure better work with systems integrators.
Putting business-focused outcomes rather than deadlines in the contract is one way to ensure focused, and henceforth successful, projects. For instance, Herbert recently worked with a phone manufacturer that put KPIs concerning inventory turns in its contracts during an SAP implementation.
What tips do you have for ensuring successful SAP implementations?]]>
Larry Ellison, he recalled, once told him that what really helped Oracle take off was IBM announcing it was working on a relational database.
At the time, Oracle had the best database technology, and IBM acknowledging that relational databases were a big deal simply elevated Oracle’s profile, Nelson said.
And, as his story goes, Ellison said, “Someday, SAP or Microsoft will do the same thing. They’ll start talking about the importance of what you do, but won’t be able to deliver on it yet.”
SAP’s announcement of its on-demand strategy is “another IBM moment for us,” Nelson said. “The opportunity in front of us is huge. With SAP’s announcement today, everyone realizes [SaaS] is the future of software.”
And, he said, customers aren’t going to wait around for SAP to get it right.
So is SAP too late to the game? It’s no secret that SAP has struggled to get an on-demand strategy off-the-ground. Business ByDesign still isn’t fully to market yet.
But there’s one important difference with its new strategy for enterprises — it doesn’t seem to want to re-invent the wheel anymore. While SAP sells CRM on-demand, and promises Business ByDesign is still coming, there’s no indication, at least now, that’ll it’ll develop on-demand, back-office applications for large companies. Customers, it envisions, instead will use its on-demand applications to augment line of business functionality in their on-premise systems.
Maybe developing back-office, on-demand apps is a game SAP no longer sees as winnable, or perhaps, profitable.
It’s something that seems to be guiding the on-demand strategies of the mega vendors now.
SAP’s push to extend line of business functionality in an on-demand manner is very similar to Microsoft’s “Software plus Services” strategy, a hybrid of on-premise and on-demand software.
Oracle seems to be following suit. In May, the Wall Street Journal reported that Oracle was working on seven new on-demand offerings — applications that would help businesses run sales campaigns, keep track of employees and job applicants and manage marketing.
It’s an approach that is validated by the deal Siemens signed with SuccessFactors this week — which, at 420,000 seats, is one of the biggest SaaS deals to date. Siemens didn’t rip out its SAP HCM deployment. It’s simply augmenting it with talent and performance management software.
SuccessFactor’s Paul Albright told me that its strategy is to act as a partner with the big vendors, rather than rip and replace deep-rooted back office software. They’re eight years old and this year are on pace to bring in $140 million in revenue, so it seems to be working.
“We see ourselves as complementing the investment companies have made in an SAP or Oracle,” he said, adding that they have more than 1,000 SAP and Oracle customers running their software
I think SAP will still pick up customers once Business ByDesign, its SaaS ERP, goes to market, which analysts expect sometime next year.
And I don’t think Oracle making things more interesting by buying NetSuite (Ellison owns a majority stake in the company) is far-fetched at all. Nelson wouldn’t bite Wednesday when I asked whether there was truth to those rumors.
But are the mega vendors signaling that their major on-demand strategies will leave the back-office, on-demand deployments to the NetSuites of the world?]]>
The middleware leader is getting ready to deliver a tool — Tibco Silver — for building enterprise grade applications of top of a public cloud infrastructure, according to SearchSOA.com. The applications will run on Amazon EC2 for now, but they’re planning on supporting other cloud providers in the future.
Back when Oracle bought BEA Systems, there was lots of talk about SAP perhaps buying Tibco. Bloggers and analysts engaged in loads of commentary on what SAP needed to boost its own middleware – NetWeaver — and why Tibco would make an excellent acquisition. Much of this is summed up well in this 2007 blog by ZDNet’s Dennis Howlett.
In turn, a recent Forrester Research report ranked Oracle’s Fusion middleware ahead of SAP NetWeaver, touting its broader set of tools, and better support for openness and standards.
Tibco’s still available — could it bolster SAP’s middleware?
Add to that scenario the benefit to SAP’s cloud computing strategy, and Tibco’s looking good. SAP has said repeatedly that it’s trying to find a way to accommodate enterprise customers in the cloud. That’s a governance challenge that Tibco is going to tackle with Silver, Tibco’s Rourke McNamara, head of product marketing, told SearchSOA.com:
“We have been looking for a way to make the cloud useful to enterprise customers, and have talked to them about stumbling blocks such as the lack of governance, lack of portability of skill sets and code, and security.”
According to the article, Silver also features integration as a service, built on Tibco’s core service bus technology, which simplifies the process of sending and receiving data with other enterprise applications like SAP, Oracle Financials, and Siebel.
Plus, the product sounds as though it’ll be platform agnostic — the direction SAP is indicating they want to go with the cloud.
Might Tibco make a nice 2009 acquisition for SAP?]]>