ERP: the state it's in

Enterprise resource planning (ERP) has always been a horrible acronym, and it gets more meaningless every year. Originally just comprising manufacturing software, it expanded to include accounting and human resources software, and now ecommerce and customer relationship management are parts of these giant suites, used by large companies to manage every detail of their business.

But it's been a tough period for many of the firms providing the software. Sales went through the roof a couple of years ago, as many users chose to buy new packages rather than make old ones Year 2000 compliant. Given the fact that such packages are often in place for at least five years, bust predictably followed the boom, and many vendors have felt the pinch.

Yet others haven't. Specifically, the market-dominating SAP is recording modest growth, as is Oracle. Other players haven't done so well: the UK's JBA was bought by Geac, once-huge SSA's revenue continues to slump, Baan's losses are horrific, and PeopleSoft and JD Edwards are selling less than they were a year ago.

Meanwhile, the purely front-office vendor Siebel continues to gain ground - included here as the bulk of its rivals have been bought by ERP firms.

Customer relationship management and ebusiness are the two themes that the vendors are shouting about. SAP will continue to dominate, and Oracle will continue to snap at its heels; but for many of the others, the future is less certain.

SAP
Walldorf, Germany
Main products: R/3, MySAP.com
Revenue for quarter to end of December 1999: EUR 1.65 billion, up 30 per cent on a year ago
Market Share: 55 per cent (1998 world), dominates UK manufacturing market for both large and midsized enterprises (November 1999)
Co-chairmen: Hasso Plattner and Henning Kagermann
Slogan: 'Have fun with SAP'
Customers: ICI, Microsoft UK, Guinness and Halifax, among many

The clear market leader claims a majority of the world's biggest corporations as customers. Indeed, the German giant has spawned an industry of its own in firms that will implement the software - unlike Oracle, it does not have in-house implementation staff for hire.

The one notorious drawback is that implementations often last many months or years. SAP has made several efforts to cut this back, for example with quick implementation methodologies. Even so, installing SAP is always a big job, and when it goes wrong, it can cause chaos: see Bang & Olufsen story.

When in place, SAP has a reputation for reliable but dull software, at least in terms of user interface; again, SAP is trying to tackle this with a greater emphasis on design. Users can now customise a Windows-style desktop through which to access SAP's products.

The umbrella branding for all products from now on is MySAP.com, the address of a free online marketplace set up by the firm, where all web users can trade and communicate - although this has been criticised by analysts for helping SAP users more than others. Why is anyone surprised? The firm itself is trying to make itself more like the US firms that have beaten it on innovation, if not reliability: it finally announced executive stock options in January, after losing too many staff.

Summary: Reliable, the best customer list, and running hard to catch up with the hottest innovators.

Links
SAP press releases
NYSE stock price and news
SAP's hub plan draws fire
SAP jumps on applications hosting bandwagon
SAP forced to offer stock options
SAP and IBM become bedfellows
SAP talks up its online sales efforts
SAP and BEA combine to develop high availability
SAP is blamed for problems at European hi-fi manufacturer

Oracle
Redwood Shores, California, US
Products: Oracle Applications suite
Revenue for quarter to end of November 1999: $2.3 billion, up 13 per cent on a year ago; $168 million (applications software sales only), up 31 per cent on a year ago.
Market Share: 14 per cent world), has just 23 per cent of the level of business SAP has among large UK manufacturers (November 1999)
Chairman: Larry Ellison
Slogan: 'Oracle software powers the internet'
Customers: BT, BP-Amoco, Reuters

Bigger than SAP overall, but still primarily noted for its database management software, Oracle badly wants to steal the big German's ERP crown. The two companies are culturally poles apart, with SAP's cautious manner in stark contrast to the showmanship of Oracle boss Larry Ellison (see sample performance regarding Microsoft, below).

Oracle's Applications suite is often ahead of SAP on ideas: it was earlier in concentrating on the internet for delivery, and it beat it on introducing customer relationship management software. Its results are strong, too: Oracle is too big to be bought, except perhaps by Microsoft (a deal which would produce the culture clash of all time).

But a note of caution: Oracle has a reputation for making promises it can't quite keep, for example on licensing, where a pledge that all users would be on a single price-list was later scaled down. A US Applications customer has just announced a lawsuit.

Fortunately, the vendor has a strong UK User group to keep it in line. The new UK boss, Ian Smith, has promised to champion the customers, since he came from BT, a major Oracle user: although the departure of his predecessor, Philip Crawford, was surrounded by the kind of internal politics the firm is famous for.

Summary: Big, innovative, but join the user group for your own safety

Links:
Oracle News
Nasdaq stock price and news
UK User group
Food producer files $20 million lawsuit
Oracle & Ellison deliver - big time
Microsoft using shareholders as hostages, says Oracle's Ellison
Oracle to revamp software licensing and pricing policy
Oracle to run $300 bn supply chain for Ford
Oracle UK boss talks tough

PeopleSoft
Pleasanton, California, US
Products:A range: HRMS is the flagship human resources productRevenue for quarter to end of December 1999: $372.3 million, down 9.5 per cent on a year ago
Market Share: 14 per cent (1998 world)
CEO: Craig Conway
Slogan:'Applications for eBusiness'
Customers: Unilever, Marks & Spencer, BT (for human resources)

1999 was not a good year for PeopleSoft. After much delay, it finally acquired customer relationship management vendor Vantive in October, having allowed Oracle to steam ahead. The firm tries hard to promote itself as a friendly business, with its roots in people management: it came at this market from the direction of human resources, and the focus remains on this and financials, unlike the other firms that started from software for manufacturing.

Summary:Having problems, but has a strong customer list for human resources

Links:PeopleSoft press releases
Nasdaq stock price and news
PeopleSoft shows signs of recovery
CRM popularity hits PeopleSoft Q3
PeopleSoft acquires Vantive in $433m deal
PeopleSoft founder steps down as CEO

JD Edwards
Denver, Colorado, US
Products:World Software (for the AS/400 only), OneWorld (multi-platform)Revenue for quarter to end of January: $231.7 million, down 1 per cent on a year ago
Market Share: 9 per cent (1998 world), has 44 per cent of the level of business SAP has among large UK manufacturers, and 37 per cent among midsized UK manufacturers (November 1999)
CEO: Doug Massingill
Slogan:'The Idea to Action company'
Customers:BSkyB, Manchester United

This firm, around which Denver has built a mini IT industry, has been in financial choppy waters, with two quarters of losses before a recent return to profit. Its approach to customer relationship management has been to team up with Siebel, rather than build its own product, and it recently announced an expansion of its partnership programme, with IBM and Andersen drafted in to boost functionality. For years pigeonholed as an AS/400-only vendor, the firm has shouted about its multi-platform OneWorld sales, now in more than 600 sites, and its ActivEra ecommerce software. Has a reputation for continuity: the 'Edward' of the name, Ed McVaney, is still president two decades after the firm's foundation.

Summary:Partnering rather than building many of its new ideas, but a steady bet

Links:
JD Edwards press releases
Nasdaq stock price and news
JD Edwards forms alliances in bid for OneWorld domination
JD Edwards surprises Wall Street
JD Edwards incurs further losses

Baan
Barneveld, The Netherlands
Products:A range, including BaanERP, Baan Front Office
Revenue for quarter to end of December: $372 million, down 9 per cent on a year ago
Share: 8 per cent (1998 world), has 21 per cent of the level of business SAP has among large UK manufacturers (November 1999)
CEO: Pierre Everaert (acting)
Slogan:'Get aahead'
Customers:Boeing, GKN

Of all the ERP vendors, Baan has yet to emerge from financial chaos. In the last three months of 1999 it lost $236 million. Predictably, it is now looking to ecommerce to save itself, although it did itself no favours when it delivered its ecommerce software earlier this year - five months late. The firm's history is in manufacturing, and it purchased vendors - such as respected UK accounting firm Coda - to build up its functionality, only to sell it early this year, losing $20 million on the deal. Chief executive Mary Coleman left recently for pastures new. In constant trouble: customers have to ask if it will be around in its present form for much longer.

Summary:Can it escape its ongoing financial problems?

Links:
Baan homepage
Nasdaq stock price and news
Troubled Baan 'a target for takeover'
Baan sells off Coda for nearly $40 million less than it paid
Baan plots the road to recovery
Baan chief executive leaves amid job cuts and restucturing
Big Baan theory is ecommerce
Baan looks to ebusiness to stem losses
Baan loss shocks analysts
GKN takes off with Baan software

JBA (a unit of Geac)
Edgbaston, West Midlands, UK (Geac: Markham, Ontario, Canada)
Products:System 21, @ctive Enterprise
Market Share: has 45 per cent of the level of business SAP has among midsized UK manufacturers (November 1999)
Customers: Bass, One2One

JBA, the only large UK ERP house, specialised in manufacturing software for a few vertical markets, in which it led or came close: clothing & footwear, food & drink, and electronics. After a rollercoaster life at the hands of the London stock exchange, it was bought by Geac in September, at which point the Canadian software group pledged to leave head Ken Briddon to run the business as he saw fit.

It didn't work out that way. Briddon left within weeks, and Geac put out a statement saying the JBA brand would be dropped. However, the Canadian firm has since relented - JBA will live on as a name, at least in the UK. It retains many British customers, who will need reassurance that Geac is serious about keeping their firm properly funded.

Summary:Another Brit company bites the dust: users should make sure they feel comfortable with Geac

Links:
JBA press releases
Toronto Stock Exchange information on Geac
JBA user group email: debbie_adams@jbaworld.com
Geac metamorphosises JBA into Geac ERP, but cuts 20% of staff
JBA sale sparks spending fears
JBA focuses on customer
Geac buys UK's JBA for $136.3m

SSA
Chicago, Illinois, US
Products:eBPCS
Revenue for quarter to end of January 2000: $52.1 million, down 42 per cent
Market Share: has 64 per cent of the level of business SAP has among large UK manufacturers, and 64 per cent amongst midsized UK manufacturers (November 1999)
CEO: Robert Carpenter
Slogan:'The Portfolio Solutions Company'
Customers: Glaxo Wellcome, Sony

SSA was once huge: no longer. But it does retain a large UK customer base, due to its history. In recent times, the firm's strategy has been to sell partners' products to its existing customers. However, the revenue continues to fall alarmingly, and as result, in September the firm was kicked out of the main Nasdaq market. Chief executive Carpenter says things will turn around: maybe. It made a pre-tax loss of $9.2 million in the three months to the end of January.

Summary:Declining firm that seems to survive on past glories

Links:
SSA press releases
SSA issues Q4 profits warning
SSA's stock relegated to Nasdaq Smallcap marketPub row gives SSA a hangover (88272)

Siebel Systems (customer relationship management only)
San Mateo, California, US
Product: Siebel 99
Revenue for quarter to end of December 1999: $268 million, up 109 per cent on a year ago
CEO: Tom Siebel
Slogan: 'Ensuring Customer Success'
Customers: ICL, Cable & Wireless Communications

Siebel is the only big customer relationship management vendor still independent, after its competitors were bought: it is also the market leader. Founded by Tom Siebel, a former star salesman for Oracle, it is growing rapidly. It is always fun to guess whether anyone will try to buy the firm, but the only ERP players large enough, SAP and Oracle, have both written their own front-office software. Seems to be looking to partnering as a way to expand, cutting recent deals with i2, Manugistics and JD Edwards, although it is talking about developing software to deal with the fashionable Wireless Application Protocol mobile phone standard.

Summary:Never knowingly underhyped, but the customer relationship management specialist is living up to it for now.

Links:
Siebel press releases
Nasdaq stock price and news
Siebel signs i2 and Manugistics deal for B2B ecommerce assualt
Siebel beats fourth quarter expectations amid talk of new applications
Siebel gobbles up OnTarget in $259m deal
Siebel details lawsuit brought by SAP
Siebel signs reseller deal with IBM in bid to remain independent
Siebel is fastest growing technology company in Silicon Valley
Further reading: Virtual Selling, by Tom Siebel and Michael Malone, £17.99. Not exactly an unbiased view from the chief executive, but at least you'll know the sales pitch in advance.

Notes on research:
World market share figures: Goldman Sachs
UK manufacturing site market share figures: Benchmark Research