10 ERP Players Shaping The Market
ERP is a foundational technology for enterprises. After years of consolidation and rivalries, the landscape has evolved tremendously. Cloud-based vendors jumping into the mix could usher in a new wave of market disruption. Here are 10 major ERP players you should know.
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Enterprise resource planning software packages are typically heavy-duty investments for running an entire business, and almost every enterprise-sized company relies upon some sort of ERP or business management software package.
Traditionally these packages can take more than a year to implement, and they are so deeply embedded in the business that once they are in place it's a monumental task to switch from one vendor to another vendor, particularly for big companies.
These packages of software applications can touch on accounting and financial management, product planning, inventory management, manufacturing, distribution, pricing, shipping, payment, marketing, and sales. These front end applications are used by employees throughout the organization, and they all use the same backend database as a repository.
Many of these packages have been in place for years, sometimes decades, and often customers follow the reliable upgrade paths provided by their chosen vendors.
But plenty has changed in the ERP space in the last decade. ERP vendors have consolidated, with smaller players snapped up by one of a handful of giants in the space. Meanwhile, many startup vendors have created industry-specific software suites, and the big players in the market have followed with their own vertical market packages.
[Looking to apply the lessons of Agile development to your enterprise? Read 8 Steps For Creating an Agile Enterprise.]
With the entry of cloud-based vendors, a new wave of market disruption may be underway. Giants such as SAP and Oracle are facing new competition from new vendors born in the cloud such as Workday and Salesforce. These cloud-based vendors are offering software-as-a-service based ERP and enterprise applications that are sold on a subscription basis rather than a software license basis. That means there's not the same capital investment up front for these systems.
These cloud-based systems, which are growing at a rapid pace, also allow vendors to provide software updates, improvements, and fixes at more regular cadences. These regular automatic updates eliminate the issues that come from enterprise customers that defer new capital investment in software and end up using on-premises software well past its prime.
Now even the traditional on-premises software giants such as SAP and Oracle are entering the cloud market with their own cloud-based versions of enterprise applications.
Take a look at our snapshot of the players in today's ERP market, from the traditional providers to the upstarts that are changing the way ERP is done. There are some big players here and a few that serve smaller businesses, because investing in the right ERP system is like investing in a vehicle. You don't want to buy a sports car if you have a family of 20 to transport.
There's no need to buy a superbus if you are a single person traveling alone. Here's a look at 10 ERP providers you should know. Tell us what you think in the comments. Do you agree with our selections? Did we leave any notable ones out?
[Editor's note: This entry for Salesforce in this article has been updated to clarify the relationship between the company and FinancialForce.]
Based in Germany, with its North American headquarters in Newtown Square, Pennsylvania, SAP is one of the oldest and biggest providers of enterprise-class ERP software. The company was founded in the 1970s by a group of ex-IBM engineers. The product has moved from mainframe, to client/server architectures, to cloud.
Last year, SAP released a product that it said is the most important for the company in 30 years. SAP S/4HANA combines SAP's front end ERP application suite with the company's backend in-memory database. It marks the first time that SAP has required its applications to use its own database instead of allowing third-party databases to be employed. S/4HANA is available in the cloud or on-premises. At the company's May 2016 Sapphire event, executives said that 3,200 customers have migrated to the new version of the company's flagship product.
Oracle is another one of the giants in the ERP space. Originally a database company, Oracle has also long offered its own enterprise applications. The company has acquired other enterprise application companies over the last few decades. It has also promised a comprehensive cloud approach, offering its technology both in the cloud and on-premises, so enabling true hybrid operations for customers. Oracle is now leading with its cloud pitch on its ERP for Enterprise web page.
Microsoft is probably best known for its Windows operating system; its Office productivity suite that includes applications such as Word, Excel, and PowerPoint; and now its cloud service, Azure. But the company also offers enterprise applications under the brand name Dynamics, with offerings that include both ERP and customer relationship management (CRM) applications. Within Dynamics ERP, Microsoft offers multiple product lines created from ERP acquisitions over the years. Microsoft announced in early July 2016 that it will combine its cloud CRM and cloud ERP into one service called Microsoft Dynamics 365.
Infor claims 40,000 ERP customers serving manufacturers and distributors in a wide variety of industries. The company says that it solutions help organizations minimize customizations. Infor has grown by acquisition (more than 30 of them) since its start in 2002, including the 2011 deal to buy Lawson Software.
Epicor provides ERP and retail applications to 20,000 customers around the world. The company announced in July 2016 that it had been sold by private equity owner Apax Partners to another global investment firm KKR in a deal that The Wall Street Journal reported was worth $3.3 billion. Customers include Ace Hardware.
Workday is the cloud-based ERP and human capital management company founded by former PeopleSoft executives David Duffield and Aneel Bhusri after Oracle's hostile takeover of PeopleSoft at the end of 2004. Workday was founded in March 2005. Oracle Chairman Larry Ellison frequently cites Workday as a cloud competitor.
NetSuite claims more than 30,000 customers for its cloud-based ERP solution, including Land O' Lakes. Oracle Chairman and CTO Larry Ellison is a large stakeholder in the company. NetSuite has also grown by acquisition. It's snapped up at least eight other companies since 2008.
UK-based Sage serves the small and mid-market business market and claims over 6 million customers around the world. But the company says its Sage X3 is an enterprise-sized business management software that "frees organizations from the effort and complexity of traditional ERP."
Sometimes Intuit's QuickBooks is the right solution, preferable over a giant ERP system, depending on the size and business of the company deploying the software. Intuit pitches QuickBooks Enterprise as an "ERP Alternative."
The company says that QuickBooks Enterprise is not an ERP system. Instead, it's an advanced version of the company's accounting software for mid-market companies that provides an integrated environment that can offer advanced inventory tracking and management, advanced pricing features, and advanced reporting.
Sometimes Intuit's QuickBooks is the right solution, preferable over a giant ERP system, depending on the size and business of the company deploying the software. Intuit pitches QuickBooks Enterprise as an "ERP Alternative."
The company says that QuickBooks Enterprise is not an ERP system. Instead, it's an advanced version of the company's accounting software for mid-market companies that provides an integrated environment that can offer advanced inventory tracking and management, advanced pricing features, and advanced reporting.
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