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2015 to be Year of ERP Vendor Upheaval


December 22, 2014

Doug Hadden, VP Products

Many ERP vendors will be relieved to complete 2014 in relatively good shape because of the increased competitive environment from SaaS and vertical software vendors. The expansion of ERP vendors in the middleware market to “own” customers by owning the software stack has come under significant pressure from open source products that are often much better quality. It’s no wonder that big data innovation, even in the largest enterprise software vendors, are underpinned by open source technology.

There will be let up in 2015. Increasing consolidation where legacy vendors acquire up-and-comers will add complexity rather than reducing competitors. ERP vendors will confront 2015 as the Year of the Customer. Interesting times for ERP and enterprise software in 2015. Here are the predictions:

  1. Cloud, vertical and mobile-first enterprise software vendors will enjoy increasing market share as legacy vendors struggle with limited organic growth. It’s the technology – legacy, proprietary, complicated, not web-native and hard to integrate that will hamper growth among leading ERP vendors.
  2. It’s the high failure rates in ERP implementations because of highly customized code that CIOs will question. New technologies from leading vendors, particularly “engineered systems” with “in-memory computing” will give CIOs the compelling reason to consider alternatives. CIOs will be very concerned about vendor lock-in.
  3. ERP consolidation will decelerate because of diminishing returns: not acquiring new customers, difficulty integrating software and companies, and the burden of multiple code bases.
  4. Major technology vendors will no longer be able to rely on information asymmetry and arbitrage. Technology analysts will require adding value, not just providing information for a fee. Vendors will no longer be able to keep information on licensing and other trends tight as buyers interact more via social media.
  5. If you thought that “best of breed” and “Tier 2″ was on life support – think again. Costs, ease of use, horizontal and vertical functionality are back with a vengeance. As is – internal corporate development.
  6. And, all of this resuls in big changes in the ERP channel including some disintermediation through digital technology, need to improve results, need to show value in an increasingly globally competitive world and with software “customization” on the wane.
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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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