April 17, 2000
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ERP Market Loses A Pair Of Struggling Vendors
System Software Associates' demise could be risky for customers; Fujitsu buys Glovia
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he market for enterprise resource planning software got a little smaller this month, as two struggling ERP vendors, System Software Associates Inc. and Glovia International LLC, were swallowed up. Gores Technology Group, a technology acquisition-and-management firm, bought SSA for $52 million in cash and 25% of its common stock. Fujitsu Ltd. acquired 100% of Glovia, which it co-founded with McDonnell Information Systems in 1997.While both vendors have arrived at a similar fate, their tales are very different. SSA has been struggling since its object-oriented ERP package, BPCS version 6, flopped in 1995. Though the company claims more than 6,500 customers, its products have been plagued by faulty technology. "They've been on a downward spiral for the last two years," says AMR Research analyst Dave Caruso. "The final shoe has dropped on their demise."
Some SSA customers pulled the plug on their projects long ago due to product deficiencies in BPCS. Fort Wayne Plastics Inc. in Fort Wayne, Ind., terminated its SSA project in 1997 after glitches in the new Unix version of BPCS, version 5.2, were going to push the implementation from the originally planned time of six to 12 months to as long as two years. It now uses an ERP package from QAD Inc. called MFG/Pro. "SSA tried to jump on the Unix bandwagon before they were ready to go," says Mike Durant, director of IS at Fort Wayne Plastics. "They got in over their heads and didn't have support and expertise for the product."
The acquisition presents a significant risk for SSA customers. Meta Group analyst Barry Wilderman recommends that customers start thinking about a migration strategy to another ERP package.
The situation for Glovia--which has mainly suffered from a lack of leadership, according to analysts--is slightly less dire. "Fujitsu is a well-heeled company that can put some money into Glovia and revive it," says Caruso. But he remains cautious. "They have a long road back to any real prominence. With the acquisition, they lose so much mindshare that it will be doubly hard to gain that back."
As companies turn their attention and spending toward E-commerce-enabled ERP and customer-relationship management applications, analysts expect more shakeouts in the ERP market. Says Wilderman, "We're watching to see what happens with Baan next."
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