Top 5 On-Premise Enterprise Resource Planning (ERP) Software Systems

The ERP Evolution Continues

The ERP systems evolution is taking an unusual turn. For those that may remember, ERP applications were originally introduced as mainframe and host-based monolithic applications in the 1970's and 1980's. McCormack and Dodge and MSA (Management Sciences America) were fierce competitors and between them owned the lions share of the ERP software market. The two rivals ultimately merged to become Dun & Bradstreet Software. Following the merger of the number one and number two market share leaders, Dun & Bradstreet Software believed itself to be an unstoppable ERP application titan, however, was soon thereafter completely replaced by the introduction of client/server applications and later sold to Geac for a marginal fee valued largely on existing customer software maintenance contracts.

Starting in November 1992, the client/server ERP applications began appearing from no-name or lesser name software manufacturers such as Platinum Software, PeopleSoft, Oracle Financials, Baan and SAP. These distributed software and GUI interfaced applications grew at the expense of the mainframe ERP systems. Midrange systems such as the AS/400 continued to survive, however, their growth days were clearly over. The most notable of the client/server ERP players - SAP and Oracle Financials - stand alone as today's ERP application market share leaders. However, now they too are threatened by new technology paradigms from software as a service (SaaS) competitors and open source software.

At the turn of the century, SaaS ERP systems were introduced as a new pricing and systems management alternative to client/server systems. While originally weak in software depth and scalability, leading ERP systems such as Aplicor, Intacct and NetSuite have evolved to deliver functionally equivalent ERP applications, however, with the advertised advantages of the SaaS delivery model (e.g. subscription pricing, hosted delivery, fewer internal IT resources, etc.). These leading SaaS ERP applications are clearly replacing the middle market client/server ERP systems (most notably the Microsoft ERP products of Great Plains, Solomon, Navision and Axapta) in many situations, however, are not yet mature enough to take on the industry giants Oracle or SAP.

Open Source ERP has yet to prove itself as a replacement to commercial ERP applications. While open source ERP applications are clearly growing, they are more often than not used to create first time business systems for young companies or replace antiquated custom built ERP applications with new custom built ERP applications this time built on open source technology.

While Microsoft, Oracle and SAP would be wise to reference the then seemingly unstoppable power of their Dun & Bradstreet Software predecessor, they appear to instead exhibit a similar behavior to Dun & Bradstreet. All three have scoffed at the SaaS delivery model and mocked the open source initiative. While they are now finally showing some interest, that interests appears to belittle more than dipping their toe in the water and their strategies appear to be more of a defensive tactic designed to slow down the market share loss of their customer base to these new ERP models. We suspect there will be a turning point where protection of their self interests will prove futile and these industry heavyweights will embrace at least the SaaS model and possibly show some substantive interests in the open source model.

Epicor	Infor	Microsoft	Oracle	SAP
Long history of reputable products Over 20,000 customers, 140 countries, 30 languages In major growth mode Reasonable VAR channel Several strong industry solutions ERP consultant strength MS/SQL/SOA technology Low to moderately priced	3rd largest global ERP maker Over 70,000 customers Several different ERP systems Vertically focused ERP solutions Lean manufacturing capabilities Complex and discrete manufacturing Process manufacturing Strong distribution and SCM Low to moderately priced	Over 83,000 ERP customers Strong SMB/mid-market solution Very strong partner channel Only sold through VAR channel Multiple ERP products ERP road map questionable Solutions often vary by global region MS/.Net/SQL technology Low to moderately priced	Over 37,000 application customers Claim #1 CRM market share leader #2 ERP market share leader 30 year proven credibility New SOA architecture Deep software functionality Outrageous flexibility Technology is the Oracle stack Priced at the high end	More than 35,000 customers, 120 countries Claim #1 CRM market share leader Built the client/server ERP market Definite #1 ERP market share leader Very impressive distribution/SCM Several industry solutions Netweaver, SQL and a chasm of technologies Priced at the high end

Enterprise Resource Planning Software Leaders by Market Segment

Small Business ERP Leaders
	Microsoft has become the ERP darling for SMB (small and midsize business) organizations. Since 2000, Microsoft has acquired Great Plains (who previously acquired RealWorld and Solomon) and Navision (who previously acquired Axapta). While Microsoft failed on the infamous Project Green integration which was to merge these solutions into an ERP powerhouse, the company does an impressive job at continuing to advance these solutions independently. The Axapta and Navision products offer strong distribution and manufacturing capabilities and are far more popular in Europe than in North America. Great Plains remains a channel favorite and offers the strongest financials among the MS product suites. Solomon also has a loyal VAR channel, strong Financials and a competitively strong project accounting and job cost suite. Great Plains and Solomon have deeper channel resources and far more market share in the United States than Navision and Axapta. Unfortunately, Solomon's maintenance and evolvement is largely outsourced (back to some of the original founders and software authors) so we're unsure how much longer this product will survive.

Middle Market ERP Leaders
	Epicor offers strong ERP software functionality along with several impressive Industry solutions for Professional Services Automation (PSA), financial services, hospitality management, retail, distribution, manufacturing, pharma and not for profit. In a late 2007 analyst release report, Epicor was recognized by Aberdeen as achieving the lowest TCO (Total Cost of Ownership) and total per user cost of software, services and maintenance for mid-size companies. In fact, the Epicor ERP solution came in at less than 50% of competing ERP products. We find the company's channel strategy questionable which may necessitate more review for international buyers. Infor is the mega company that surprising few ERP software buyers are aware of. Largely based on an aggressive acquisition and roll-up strategy, Infor is the third largest ERP manufacturer - behind only SAP and Oracle. Infor is a vertically oriented software publisher with several different ERP software systems and particularly strong distribution, supply chain management (SCM), lean manufacturing, complex manufacturing and process manufacturing solutions.

Fortune 2000 / Enterprise ERP Leaders
	SAP is the largest and most recognized Fortune 1000, Global 5000 and enterprise market share leader. The company has achieved its success due to its extremely deep accounting and distribution software suites along with tightly integrated financials, manufacturing, human resource, payroll and customer relationship management software systems. While the company claims that its retains significant middle market share, its definition of 'middle market' is more in lines with other definition of the enterprise market. Oracle is the world's second largest business applications maker - and is clearly out to take the lead role from SAP. Bolstered by its acquisitions of PeopleSoft (with JD Edwards) and Siebel Systems, Oracle has collected an impressive customer list and portfolio of intellectual property. Now the real work to keep those customers and integrate those products (project Fusion) is underway with results expected very soon. Expect several more acquisition and integration project announcements from Oracle over the coming months.