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ERP firms go wooing amid the fighting

As takeover battles heat up, vendors are offering special deals to customers

  • Gareth Morgan and Martin Veitch
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The current uncertainty over the future of many enterprise resource planning (ERP) software firms could prove advantageous for IT buyers as vendors offer loyalty bonuses and incentives for firms to switch platforms.

Many ERP firms have recently been acquired, are in the process of being acquired, or may be acquired - notably Baan, JD Edwards and PeopleSoft.

A lot of uncertainty has resulted, and some analysts believe that this puts IT buyers in a strong position.

"If you had it in mind to spend, get on and negotiate pretty damn quick. It's the best time to get a good deal," said Nigel Montgomery, director of European research at AMR Research.

Many suppliers are jockeying for position, offering easy terms and cutting prices to attract custom.

SAP, for example, has been promising customers a safe haven from the turmoil - in newspaper advertisements aimed at JD Edwards and PeopleSoft users. The company has also teamed up with IBM on joint deals aimed at small and medium-sized enterprises.

Mid-market ERP firm Intentia is attempting to attract JD Edwards users with pricing incentives and a JDE Conversion Lab, providing templates for transferring data, files and processes.

"We can empathise with these customers because we are also a mid-sized company and many firms don't want to be a customer of a huge organisation," said Wim Jansen, Intentia president for north-west Europe.

Fellow mid-market developer IFS is offering a 'Rescue Programme' for JDE users to move over without upfront costs, although the offer is currently limited to North American customers.

For its part, Oracle is holding online "town meetings" with PeopleSoft customers to assure them that they do not need to jump ship.

"It is not necessary for PeopleSoft users to migrate to a new platform," said Chuck Phillips, Oracle executive vice president, in a statement.

"Keeping PeopleSoft customers satisfied, on whichever product they choose to use, is a top priority."

Oracle's second deadline for PeopleSoft's shareholders to consider its bid has been extended again, to 15 August.

The eventual outcome, whatever the results, should enable IT managers to plan with a greater degree of certainty.

In the longer term, the main impact of Oracle's bid would be to polarise end-user behaviour in the market, said Montgomery.

Businesses would either migrate to large players or adopt a best-of-breed approach as more consolidation took place, he added.

"It's very much a cultural decision. Those looking for best of breed may even re-evaluate what they can build in-house," he said.

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