ERP's new rising star?

Bigger vendors usually mean more stability in a company but not necessarily in their product. And the product is obviously more important to the customer, what do all these mergers mean?

The recent merger of Lawson and Intentia brings Lawson more stature as a leading vendor of ERP and other solutions. What advantages does size bring to the market?

Jones: Size is an advantage in a market where decisions are made by people who need reassurance about vendor viability, and also from a support perspective. However, ultimately, from the viewpoint of the organization, an application that works for them is actually more important in my view.

Question: Will there still be room for smaller, more nimble software providers? Or are we on the cusp of a merger mania?

Jones: Merger mania has been around for some time, and will probably continue. If you consider Infor, SSA, and CDC Software, for example, all have been making significant acquisitions and will probably continue to do so if they find a good fit for their portfolios. However, the asking price may well start rising, which will have a negative effect on sustainability. My view is that there is still room for smaller providers if they can deliver flexible, working business applications, particularly in vertical niche markets.

Question: Still, with the likes of Microsoft, SAP, Oracle and others circling around ERP, won't Lawson find it difficult convincing customers that it's one of the big boys now?

Jones: Lawson is still nowhere near as big as the top of the market, even now, but has bought itself a good match both from a product perspective (not too much overlap) and a global market perspective (lots of opportunities to really sell Movex, Intentia's product, into the U.S.). However, it needs to demonstrate that it has expertise that is at least as good as the big boys have, and it needs to build up a trusted network of vertical expertise if it is to win out. If the decision-maker is willing to opt for functionality and competence within the specific verticals that are Lawson's strengths, then Lawson should still win. However, the prevalence of a "me too" attitude in terms of installing software that everyone else is running, even if it can't be demonstrated to deliver proven value, means that it will still face challenges.

This 3 Questions originally appeared in a weekly report from IT Business Edge.

This was last published in May 2006

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