Feeds

What does consolidation mean for the customers?

Errr....

  • alert
  • submit to reddit

Remote control for virtualized desktops

The past couple of weeks have certainly been interesting in the enterprise business applications space, with tit-for-tat announcements coming almost daily from the major players, writes Fran Howarth, of Bloor Research.

Many have been expecting consolidation for some time. History tells us that whenever five or so big players come to dominate a market, consolidation tends to follow. Look, for example, to the management consultancies. A flurry of mergers and acquisitions were announced in that market and parts of firms were sold off to competitors.

And so the "Big 5" enterprise business applications vendors - all of which have their roots in ERP technology - appear to be going through the same process. As yet, it is far from clear what the ultimate outcome will be. PeopleSoft's board has now urged its shareholders to reject Oracle's recent acquisition bid, but Oracle has yet to stage a counter-attack. Microsoft and IBM have also both been pushing into the software space recently.

At the moment, PeopleSoft's proposed acquisition of J.D. Edwards appears to be on track - a move that will position the combined company as the number two player in the market. The only thing that seems certain is that Baan is putting behind it its troubled recent past in a tie-up with SSA Technologies, facilitated by venture capital investors.

As predicted, SAP has also entered the fray - but not by announcing its intent to make large-scale acquisitions, as that is really not its style. Instead it is looking to capitalise on the current confusion in the marketplace in order to lure customers away from its competition.

SAP recently made claims that it had signed up some 50 of Baan's former customers during Baan's recent period of uncertainty. Now it is setting its sights on customers of PeopleSoft and J.D. Edwards that might be worried about the continued development of the technology products in which they have invested - especially if Oracle comes back with a sweeter bid for PeopleSoft.

Should customers and business partners be worried? There is certainly a lot of chatter going on and it was relatively easy to get PeopleSoft's partners and customers to speak their minds at one of its Leadership Summits held in the Netherlands. The consensus appears to be that SAP will emerge the winner - at least in the short term. But it does already stand head and shoulders above the competition in this sector, with a 54% share of the market for enterprise applications.

Even the largest companies were jolted by the recent Oracle bid - PeopleSoft's customers are notoriously loyal and, should any situation arise whereby development of their products would ever cease, its customers appear to be considering re-evaluating their investment decisions from scratch.

In the mid-tier of the market, customers and partners were saying that the integrated suite story is not resonating. One partner particularly pointed out that, since many mid-sized companies will be running their businesses on Oracle databases, putting their money behind Oracle applications as well would make them too dependent on one vendor. But that bodes well for the proposed PeopleSoft-J.D. Edwards merger, since J.D. Edwards's sweet spot is in that market and the combination of the two firms would increase PeopleSoft's exposure to that market as well.

But, in the meantime, potential customers may choose to sit tight and wait before making major investment decisions. The market for enterprise software is already tough, with extended sales cycles. It's not going to get any easier just yet.

& copy; IT-Analysis.com

Choosing a cloud hosting partner with confidence

More from The Register

next story
NSA SOURCE CODE LEAK: Information slurp tools to appear online
Now you can run your own intelligence agency
Azure TITSUP caused by INFINITE LOOP
Fat fingered geo-block kept Aussies in the dark
NASA launches new climate model at SC14
75 days of supercomputing later ...
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
Cloud unicorns are extinct so DiData cloud mess was YOUR fault
Applications need to be built to handle TITSUP incidents
BOFH: WHERE did this 'fax-enabled' printer UPGRADE come from?
Don't worry about that cable, it's part of the config
Stop the IoT revolution! We need to figure out packet sizes first
Researchers test 802.15.4 and find we know nuh-think! about large scale sensor network ops
SanDisk vows: We'll have a 16TB SSD WHOPPER by 2016
Flash WORM has a serious use for archived photos and videos
Astro-boffins start opening universe simulation data
Got a supercomputer? Want to simulate a universe? Here you go
prev story

Whitepapers

Seattle children’s accelerates Citrix login times by 500% with cross-tier insight
Seattle Children’s is a leading research hospital with a large and growing Citrix XenDesktop deployment. See how they used ExtraHop to accelerate launch times.
How to determine if cloud backup is right for your servers
Two key factors, technical feasibility and TCO economics, that backup and IT operations managers should consider when assessing cloud backup.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.