Vendors vanishing in post-technology are noted, post-AMR conference
Staff -- Manufacturing Business Technology, 12/1/2003 7:00:00 AM
Once upon a time, a manufacturer had too many ERP systems from too many vendors. Then one vendor, SSA Global, bought most of the others. The manufacturer is happy because it now has a single point of contact for nearly all its enterprise system concerns.
Another manufacturer works with ERP vendor J.D. Edwards and with its partner, Siebel, for CRM. Now PeopleSoft, which has its own CRM solution, and JDE are one. The manufacturer worries about the fate of its CRM integration plans.
Jim Shepard used these two examples at this year's AMR Research Fall Executive Conference to illustrate the vagaries following from ERP vendor consolidation. The event brought together more than 450 folks focused on that specific point where IT meets manufacture and distribution of goods.
The conference theme, Entering the Post-technology Era, and those of its keynote speaker, Carlota Perez, a professor and author, indicated some are still consumed with explaining how the Internet bubble and its aftermath fit within identified historical patterns for new technology introductions such as the railroad, telegraph, and automobile.
Meanwhile, industry prognosticators—including AMR—predict IT spending in 2004 will grow again. What's less clear is whom they'll be spending that money with.
"The recovery is here," said Dr. Henning Kagermann, co-chairman and CEO, SAP AG. "But there'll be no recovery in the 20-percent decrease in deal size we've seen over the last 12 months."
As for the next big thing, Sharon Nunes, VP, emerging business, IBM Research, said that a newly minted, crisper definition of UDDI should quicken the pace for Web services development, but the sense is that we're several years away from an interoperable computing environment based on Web services.
Which brings us back to the here and now, where self-admitted "veteran" analyst Shepard had the most to say. While other speakers searched for answers, Shepard had facts on rapid consolidation in enterprise markets.
One fact is that transactions in the software industry are taking place at a pace of 200 per quarter, or a couple every day for the last 18 months. This structural change is taking place because there are too many biz-apps "OEMs" selling directly to customers.
Another fact, said Shepard, is that applications vendors are now judged on their customer base rather than the founder's engineering acumen. That means size does matter, and there is no longer a penalty appended to vendors that grew through acquisitions. Eventually there will be a small number of OEMs, and below it a tier of component suppliers.
The question is, how many full-service suite providers will be left at the end of the day?
At the moment, said Shepard, a suite provider must have revenues of several hundred million dollars to be considered viable. But will that number rise to one billion?
The answer to that question will be much clearer at this time next year. The AMR exec conference remains one of the best events for anyone interested in use of IT to improve productivity in manufacturing and supply chain.
First post-modernism, now post-technology
08/01/2003The ERP midmarket heats up
05/01/2006
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