MiscERPMetaReportMarketSummaryLeadingsuppliersofER

10April2003METAspectrum32.0ApplicationDeliveryStrategies,EnterpriseApplicationStrategiesRonHanscomeTier1EnterpriseResourcePlanning(ERP)METAspectrumSMEvaluationMETAGroupisatrademark,andMETAspectrumisaservicemark,ofMETAGroup,Inc.Copyright©2003METAGroup,Inc.Allrightsreserved.10April2003020406080100100020406080PerformancePresenceFOLLOWERFOLLOWERCHALLENGERCHALLENGERLEADERLEADERLawsonSoftwareLawsonSoftwareJDEdwardsJDEdwardsOracleOraclePeopleSoftPeopleSoftSAPSAPMarketOverview208HarborDrive•Stamford,CT06912-0061•[phone]•Fax[phone]•metagroup.comCopyright©2003METAGroup,Inc.Allrightsreserved.METAspectrum32.0Tier1ERP2MarketDefinitionMETAGroupdefinesERPasasuiteofenterprisebusinessapplicationsincluding,ataminimum,financialandhumanresourcesapplicationsandatleastoneofthefollowing:manufacturing,supplychain(SCM),orcustomerrelationshipmanagement(CRM).ERPsolutionsshouldbecapableofsatisfyingatleast75%oftheoverallbusinessapplicationrequirementsfortargetcustomers($500M+inannualrevenues).ERPapplicationfunctionalityismission-critical,andsolutionsarethereforeregardedascoreITinvestments.Thismarketreached$15Bgloballyin2002andisgrowingat12%-15%annually.MarketForecastDuring2003/04,reducedspendingonnewERPprojectsbyGlobal2000(G2000)firmswillcauseTier1ERPvendorstofocusonsellingadditionalfunctionalitytoexistingG2000customers,furtherpenetratingthesmallandmediumbusiness(SMB)market,developingmoreverticalextensions,andbuttressingtheirtechnologyinfrastructure.During2004/05,vendorviabilityconcernswilldriveSMBERPmarketconsolidationasthesevendorsbecomeincreasinglythreatenedbyTier1vendorsandMicrosoft.By2005/06,Tier1ERPvendorswillleveragetheirapplicationbreadthandcomponentarchitecturestosignificantlyreduceapplicationcomplexity,alongwithassociatedimplementationcostandtime.G2000activitywillincreasein2007,asfirmslooktoreplaceERPinfrastructuresinstalledbefore2000.KeyFindingsTheTier1ERPmarketismatureandconcentrated,andthefivevendorsinthisanalysis—JDEdwards,Lawson,Oracle,PeopleSoft,andSAP—accountforalargepercentageoftheinvestment(morethan80%).BecauseERPpurchasesusuallyrepresent10+yearcommitmentstoapplicationarchitectureandsupportinginfrastructure,atrackrecordoflongevity,consistentperformance,andmarketleadershipiscrucial.Presenceandperformancecriteriaarethusequallyweightedforthismarket.Althoughthreeofthevendorsarelarge(withannualrevenuesinexcessof$2B),sizedoesnotguaranteehighperformance,andthesmallervendorsoftenperformatlevelsclosetothemarketleadersforspecificcriteria.Rankingvendorsinthismarketiscomplex,becauseapplicationfunctionalitymustbecomparedtothatofbest-of-breedvendors(e.g.,SiebelforCRM,i2forSCM),whiletherestoftheperformanceandpresencecriteriamustbeevaluatedrelativetotheERPvendorpool.LeadersTier1ERPleaders—SAP,Oracle,andPeopleSoft—demonstrateanabilitytobothdefineavision/strategyforERPandexecuteagainstitgloballyacrossawiderangeofindustries.Productbreadthanddepth,marketingprowess,andgeographiccoveragearecriticalfactors,asistherobustnessofthetechnologyplatform(corearchitecture,integration,andapplicationmanagement),becausefirmscountontheseapplicationstorunmission-criticalbusinessprocesses.ChallengersTier1ERPchallengers—JDEdwardsandLawson—arestable,financiallysuccessfulfirmswithalongtrackrecordofsupportingcustomersthroughmultipletechnologytransitions.However,theylackbreadthacrossnumerousindustryverticals,geographiccoverage(Lawson),andsufficientbrandawarenesstobedesignatedasleaders.Thesechallengershavedevelopedexpertiseinasmallernumberofspecificverticals(e.g.,healthcare,retail,andprofessionalservicesforLawson;construction,energy,andmanufacturingforJDEdwards)andwillcontinuetocompeteeffectivelywiththemarketleadersinthoseindustries.FollowersTherearenovendorsdesignatedasfollowersinthismarketanalysis;however,severalERPfirmsthatservethemidmarketmayattimescompetewithbothleadersandchallengers.Theywerenotincludedinthisanalysisduetovariousfactors,includingsmallsize,narrowcustomertarget,andlimitationsingeographiccoverageandfunctionalbreadth.BottomLineCurrentERPcustomersshouldbemindfulofout-of-the-boxintegrationbenefitsandevaluatetheirvendor’sfunctionalextensionsforfitbeforeconsideringbest-of-breedcomponents.G2000firmscontemplatingswitchingtheirERPplatformshouldconsiderintegration,depthofverticalindustryexpertiseandfunctionality,geographiccoverage,technology,andmarketreputationasprimarycriteria.BusinessImpact:SuccessfullyimplementedERPplatformsdelivermission-criticalsupportbyembeddingleadingtechnologiesandbestpracticesintobusinessprocesses,therebyenablingrevenuegrowth,expensereduction,andoptimalresourceutilization.Tier1ERPPresenceEvaluation208HarborDrive•Stamford,CT06912-0061•[phone]•Fax[phone]•metagroup.comCopyright©2003METAGroup,Inc.Allrightsreserved.METAspectrum32.0Tier1ERP3Ourmarketpresenceevaluationincludesareviewofeachvendor’sproductandserviceattributes—representingvendors’abilitytodelivervaluetocustomers.Thefollowingeightcriteriaareasprovideasummaryofourpresenceanalysis.Forcompletedetailsonhowvendorsfaredwitheachcriterioninourevaluation,