The enterprise resource planning (Erp) software market is unlikely to move back into growth until the third quarter of 2000, when it will be reengergised by demand for ebusiness and customer relationship management applications.
Growth in the sector is currently being stalled as a result of budget freezes due to the Year 2000 problem and the issue of European Monetary Union, but the new socalled extended applications and the complexity of interaction that they promote at both the package and the business level will drive the market in future.
However, according to Dave Taylor, a Gartner Group analyst at the Gartner Symposium in San Diego on Monday, the resultant need for high levels of integration between systems will also expose the inadequacies of vendors and the weaknesses of users? IT infrastructures.
?Extending applications will raise the market from its growth malaise. There are relatively few vendors controlling it at the moment and they need to open it up to make it grow. Erp vendors will continue to dominate because they will buy vendors from other markets, but the question is, can they get buy in from different trading partners and can you get them to pull different trading communities together,? he said.
Such acquisitions are likely to occur primarily in the enterprise application integration market, where the next generation of tools will be cheaper and easier to use, and in the customer relationship management market, which is being driven by the concept of customer self service and meeting customer demands.
As a result, the sector is receiving valuable budget dollars and these front office systems will in future be integrated with back office applications via organisations? ebusiness strategies.
But several other problems are also likely to occur during this new phase of growth. First, as systems are extended to work with trading partners? and suppliers? offerings, the problem of ownership and who will support them will become an increasingly difficult one.
Vendors will also need to rethink their software pricing models as they will no longer be flexible enough to cope with the new market demands. It is difficult for organisations to predict how many individuals will want to access their data or application over the Internet, but under the existing model, licensing costs are prohibitive, especially to medium sized companies.
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