August 18, 1997

Small Vendors, Big Wins Niche enterprise apps players deliver speed and service By Tom Stein iche enterprise applications vendors are holding their own with midsize customers, a market cited by larger vendors as a top priority. MasterPack International last week touted a $2 million contract it won over SAP, while the MK Group unit of Computer Associates grabbed business away from Baan. Airbus Industrie of North America, a unit of the European aircraft consortium, says it chose MasterPack because of speed of implementation. MasterPack and SAP both promised a one-year time frame, "but one was a comfortable 12 months and the other was tight," says Charles Fletcher, senior director of IS at the Herndon, Va., unit. Fletcher adds that MasterPack's distrib ution software has more functionality for the aerospace industry. Dickinson Engineering Ltd., a $41 million maker of equipment for the tobacco industry until recently was a Baan customer. Dickinson, in Winchester, England, was looking to upgrade from an earlier release of Baan's manufacturing software, but when the company tried to contact the vendor's U.K. office, Baan was unresponsive, says Alan Thorogate, financial director at Dickinson. In contrast, Thorogate says MK Group "gave a drowning man a hand and offered us a totally different level of service." Dickinson bought 64 user licenses for MK's manufacturing and financial applications. Some midsize companies argue that software packages from traditional midmarket vendors are cheaper and easier to install than those from the likes of Baan, Oracle, and SAP. These customers also feel they receive better service from smaller vendors. For the major vendors, which are aiming at midsize customers now that they've blanketed most large companies, th e loss of these smaller customers represents something more than a missed financial opportunity, analysts say. "Today, losing a $2 million deal from a $200 million company hurts a lot more," says Barbara Noti, an analyst at the Meta Group in Stamford, Conn. "At the perception level, this is starting to irritate the big guys." Still, SAP and Baan are making headway in the midmarket. SAP, which defines midsize customers as those with annual revenue of less than $200 million, says it's landed 40 such customers so far this year and is on track for 100 by year's end. Baan, which lumps companies under $350 million into the midmarket, says those customers accounted for $66.7 million of its $270 million in revenue in the first six months of this year. Back to News in Review Send Us Your Fee dback Top of the Page

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