Enterprise Resource Planning Software Leaders by Market Segment
For an additional market segmentation perceptive, the below summary points illustrate how the Top 5 ERP systems best line up with the small business, middle and enterprise customer market segments.
The ERP systems evolution is taking an unusual turn. For those that may remember, ERP applications were originally introduced as mainframe and host-based monolithic applications in the 1970's and 1980's. McCormack and Dodge and MSA (Management Sciences America) were fierce competitors and between them owned the lions share of the ERP software market. The two rivals ultimately merged to become Dun & Bradstreet Software. Following the merger of the number one and number two market share leaders, Dun & Bradstreet Software believed itself to be an unstoppable ERP application titan, however, was soon thereafter completely replaced by the introduction of client/server applications and later sold to Geac for a marginal fee valued largely on existing customer software maintenance contracts.
Starting in November 1992, the client/server ERP applications began appearing from no-name or lesser name software manufacturers such as Platinum Software, PeopleSoft, Oracle Financials, Baan and SAP. These distributed software and GUI interfaced applications grew at the expense of the mainframe ERP systems. Midrange systems such as the AS/400 continued to survive, however, their growth days were clearly over. The most notable of the client/server ERP players - SAP and Oracle Financials - stand alone as today's ERP application market share leaders. However, now they too are threatened by new technology paradigms from software as a service (SaaS) competitors and open source software.
At the turn of the century, SaaS ERP systems were introduced as a new pricing and systems management alternative to client/server systems. While originally weak in software depth and scalability, leading ERP systems such as Aplicor, Intacct and NetSuite have evolved to deliver functionally equivalent ERP applications, however, with the advertised advantages of the SaaS delivery model (e.g. subscription pricing, hosted delivery, fewer internal IT resources, etc.). These leading SaaS ERP applications are clearly replacing the middle market client/server ERP systems (most notably the Microsoft ERP products of Great Plains, Solomon, Navision and Axapta) in many situations, however, are not yet mature enough to take on the industry giants Oracle or SAP.
Open Source ERP has yet to prove itself as a replacement to commercial ERP applications. While open source ERP applications are clearly growing, they are more often than not used to create first time business systems for young companies or replace antiquated custom built ERP applications with new custom built ERP applications this time built on open source technology.
While Microsoft, Oracle and SAP would be wise to reference the then seemingly unstoppable power of their Dun & Bradstreet Software predecessor, they appear to instead exhibit a similar behavior to Dun & Bradstreet. All three have scoffed at the SaaS delivery model and mocked the open source initiative. While they are now finally showing some interest, that interests appears to belittle more than dipping their toe in the water and their strategies appear to be more of a defensive tactic designed to slow down the market share loss of their customer base to these new ERP models. We suspect there will be a turning point where protection of their self interests will prove futile and these industry heavyweights will embrace at least the SaaS model and possibly show some substantive interests in the open source model.