Vendor viability is irrelevant, as long as the system can live on
Sidney Hill, Jr., executive editor -- Manufacturing Business Technology, 11/1/2004 7:00:00 AM
There could be an unexpected lesson for users in the saga surrounding Oracle's attempt at a hostile takeover of PeopleSoft. What lesson, you ask? How about this? The long-standing advice from analysts and consultants about putting vendor viability at the top of your list of criteria for selecting a software package may no longer be viable in a world in which any vendor can be acquired at any time.
If you don't buy that, you may have missed the news—revealed during court proceedings on the Justice Department's attempt to block the Oracle-PeopleSoft deal—that Microsoft and SAP discussed the possibility of merging.
I started thinking about this concept of vendor viability as I strolled through the exhibitor hall at the recent APICS show in San Diego, where two previously high-flying supply chain software vendors—i2 and Manugistics—occupied some of the smallest booths on the floor.
In their heydays, these companies must have closed a fair number of deals by cautioning customers not to go with a smaller competitor that might not be around when the customer was ready for an upgrade. Now, it's quite possible other vendors are using that same argument against them.
In reality, a vendor's long-term viability shouldn't be that big a deal to users these days, and I question whether it ever should have been, given the dynamics of the software market. That thought hit me during an early morning meeting, also at the APICS show, with two executives from Best Software.
To my right was James Mallory, senior product marketing manager, who outlined Best's progress at building a common infrastructure for its broad line of products for discrete manufacturers, several of which were acquired from vendors that no longer exist. On my left was Chris Knapp, senior account executive for process manufacturing, who explained how Best had merged its BatchMaster process manufacturing package and its Platinum accounting application—both acquired from other vendors—into a single, integrated suite.
Other vendors, too, continue to support—and even enhance—systems after acquiring the company that developed them. SSA Global and Microsoft Business Solutions have built their businesses around that strategy. PeopleSoft renamed J.D. Edwards' products after that merger, but it continued adding new features.
What does all this mean? It means that an acquiring vendor is not likely to kill a product if enough people want to continue using it. Most vendors would be more inclined to keep those customers happy, and be willing to pay for future enhancements to the system.
That doesn't mean you should completely forget about vendor viability when selecting systems. You want to make sure the vendor is stable enough to deliver the system you are purchasing.
Even more important, you want to make sure that the system you choose is robust enough—both technically and in its appeal to a broad enough segment of users—to live on even after the vendor is gone. In essence, what you really should be looking for is system viability.
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