SAP Watch

Apr 5 2010   7:28PM GMT

Suitemates capitalizes on the down with big ERP trend

CourtneyBjorlin Courtney Bjorlin Profile: CourtneyBjorlin

You’ve likely seen or at least heard about this Suitemates ad campaign from Kinaxis – an on-demand supply chain software vendor. The premise is that the two big ERP vendors merge and then their CEOs wind up in jail. They’re called out for high maintenance fees and support issues. It’s evident that the vendor spent some money on these things — even hiring some name-brand actors and actually shooting some quality video to push these out on YouTube.

“Down with big” is a theme that’s playing out well with the public this year. Down with big government. Down with big bonuses. Why not, down with Big ERP?

In fact, Infor started running a campaign called just that in December – “Down with Big ERP.”

It’s a good time to carry that torch. There is growing evidence that single instance ERP is “no longer the holy grail” it was once, and the shift is on to a two-tier ERP strategy for some organizations, according to a blog post by Ray Wang.

“Market forces, a move to adopt new disruptive technologies, slow pace of innovation from incumbent vendors, and high maintenance fees have changed many organization’s perspectives. Add a slew of rapidly changing business requirements battling rigid legacy infrastructures and next gen CIO’s have been forced to depart from the standard apps strategies. In fact, improved integration, web services, and SaaS deployments “have now improved the success rates and ROI for Two-Tier ERP apps strategies.”

Perhaps no one is exploiting this trend better than NetSuite – which will continue its major push on ripping and replacing SAP at subsidiaries and business units of large SAP customers, CEO Zach Nelson said when he and his team visited our offices this week.

The vendor still won’t put numbers to how many SAP customers it’s actually won here, but Nelson did say they just won a head to head deal with SAP for a manufacturer.

A couple of months ago, NetSuite announced its largest rip and replace deal yet – RedBuilt, a manufacturer with roughly 250 employees which was running an old version of R/3 – 3.1. One of the main reasons RedBuilt went with them was they knew migrating SAP users was a major focus.

“We knew a growth area was to migrate SAP users,” RedBuilt CEO Kurt Liebich said. “We knew this was going to be a visible project for them and they wouldn’t let it fail.”

SAP has said Business ByDesign –due out in July — is for this market as well — but is the message getting through? It’s something that NetSuite is capitalizing on. And it’s evident that other vendors will start to look to as well.

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