Is single-vendor versus best-of-breed a dead issue?

Interoperability is a big selling point for ERP vendors, and currently, the major players—Oracle and SAP—are pushing their own middleware platforms, which they claim make integrating specialized third-party applications with an ERP backbone easier.

This is quite a switch from the days when these vendors tried to convince users that a single, broad-based application suite would solve all their business problems. But does this mean the single-vendor versus best-of-breed debate has been rendered moot?

Industry analysts say no, though they also note that technology advances—such as ERP vendors' middleware platforms and service-oriented architecture (SOA)—injected a new element into the argument.

The idea of standardizing on a single IT platform has powerful appeal to companies looking to simplify IT operations, says Eric Austvold, an analyst with Boston-based AMR Research. That explains why a company like Greatbatch,a medical device manufacturer based in Clarence, N.Y., would opt to run its business completely on the Oracle E-Business suite.

Greatbatch had acquired four companies in a five-year span, each with its own homegrown or small packaged enterprise solution. Greatbatch's own ERP system was nearly 20 years old and had been customized "beyond the point of usability," says Tae Park, senior director of IT. "We also were facing Sarbanes-Oxley compliance. We were looking at building a plant in Tijuana. We needed a single system that would support our business strategy."

Size was another issue. "We're midmarket—$200 million to $240 million in revenue a year," says Park. "We can't afford the IT support needed to go best-of-breed. We're not big enough to support that kind of complexity."

But Dennis Constantinou, Oracle's senior director of marketing for life sciences, says Oracle realizes not all companies want to follow the same strategy as Greatbatch, thus the need for Oracle middleware.

"Mature companies will have a number of legacy systems and third-party applications," Constantinou says. "We can provide connections with middleware technology to facilitate moving data across multiple applications."

David Dobrin, a principal with Cambridge, Mass.-based B2B Analysts, believes having their own their own middleware platforms—which are built on SOAs—gives large vendors like Oracle and SAP the chance to maintain their positions atop the enterprise software market while also offering users the ability to choose best-of-breed applications. He thinks it will take time for that scenario to play out completely, however.

"[Over the long term] the serious money will be made by the large platform players," Dobrin argues. "The problem is older technologies can't be integrated [with SOA-based systems] unless they are SOA-enabled—and most of them aren't."

For now, says Dobrin, users have to look at the best-of-breed versus single-vendor issue the same way they look at owning a car. "Say you like your old car and want to keep on using it. To do that, you replace various parts over time," he says. "Getting a new car is a different ownership strategy."