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ERP Software Market Dynamics

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(The Word 'Dynamics' not to be confused with Microsoft's recently announced name change - Dynamics for their ERP product range.)

Gray Arrow ERP Sandwitched Between Cloud Computing & Mobile Devices

Gray Arrow Most Mainstream Global ERP Solutions have been caught unawares by the strong market momentum towards Cloud Computing.

A technology trend exemplified by Amazon's EC2 Web Services, Google App Engine & SalesForce - Platform As A Service (PAAS) Offering on one hand & Mobile Devices Platform (Apple's iphone, Microsoft's Windows Mobile, Nokia's Symbian, Google's Android & RIM's Blackberry ) Usage Explosion amongst End-Users.

Very few global ERP vendors will have the strengths to develop scalable solutions that manage & map mobile devices to cloud computing scenarios demanded by Global Enterprises in the future. ( 6th June 2008)

History teaches us some lessons. At the turn of the last century, there were thousands of automobile manufacturers.

Today there are globally only 3 large volume manufacturers and the remaining are niche players.

Software Industry is today in a similar position.

It is consolidating very very fast and getting commoditized due to various mega trends like Offshoring, Open Source and Globalization.

Paretto's 80-20 Law (20% of the Entities are responsible for 80% of the Actions).

The Rule of Three (In any market, ultimately only 3 players have the major market share) will finally prevail in the Enterprise Software Market.

Whether the same is called as ERP or IERM or EAI or SOA or Middleware.. or any other 3 character acronym.

Continous Consolidation in the ERP market causes confusion and uncertainity in the minds of customers.

As regards selection of the particular ERP technologies, availability of long-term support and trained people in the particular technologies and the business domains.

Software as a Service (SAAS) as a market trend is the route that ERP companies will follow.

The success of Salesforce and other similar ASP (Application Service Providers) operating in niche software hosted application markets will prompt ERP vendors to consider offering similar services to their customers.

Again, here the main concern of customers is the richness of application features and the reliability of vendor support in terms of system uptimes.

The recent instances of system outage at Salesforce which led to a suspension of service for a few hours did raise some fears in the minds of their many consumers.

However, as globally distributed communication networks become more and more reliable, the experience and satisfaction levels of end users in these hosted applications is bound to increase.

The end goal of most ERP vendors should be delivering rich SAAS flexible applications on an optimal ROI basis to their customers.

ERP organizations will have to work with Systems Integrators, Functional Domain Experts and Customer Geography specific partners for the same.

Delivering feature rich, geography relevant, customised flexible SAAS applications will be a true challenge for most ERP Vendors.

However, the increasing trend of globalization and offshoring makes it possible to design and deliver cheap hosted SAAS applications.

Going ahead, large serious ERP Vendors like Microsoft, Oracle, SAP and others are ensuring that their applications would be web-engineered for delivering it as services in a true utility like pay per use delivery mode.

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Last Updated on 13th March 2009
Posted on 5th July 2004

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