This note concerns the launch of SAP Business One by SAP AG (NYSE:SAP), the pairing of SAP and the Tax and Business Services (TBS) unit of American Express, and the delivery of 13 new mid-market solutions designed specifically for companies with $50 to $500 million in annual revenues by PeopleSoft Inc. (NASDAQ: PSFT). For details of these announcements see Part One.
The fact that the mid-market and the SMB segment are the next frontiers and a promised land for all the enterprise vendors, small and large alike, has long not been news. Still, the willingness of smaller IT departments to go for more sophisticated technology beyond the all-too-common dispersed islands of information on Excel spreadsheets, Access-based reports and queries, or even managers' pocket paper-pads and post-it notes, does not guarantee any vendor an easy ride. That has been proven by a number of trials-and-errors, and consequent strategy reiterations that the larger enterprise vendors have espoused during last several years.
Look also for a continued evolution of these applications, since over the last several years the market has seen a plethora of fixed-scope and fixed-price applications, pre-packaged vertical solutions, attractive support programs and hosting services with catchy names (e.g., �Fast Forward', �Select', �Accelerated', �On Board', �Genesis', etc.), all aimed at making it faster, simpler and cheaper for enterprises under a few hundreds $ million to use them. However, all of these typically have also implied some form of trade-off in the name of expediency. The features forsaken will have been functionality, customizability, platform options, solution scalability or extensibility.
Unfortunately for both vendors and users, small and mid-size enterprises, like their bigger brethren, generally operate in a dynamic, competitive environment and have global, multi-site operations that are either wholly owned or that function in a complex supply chain relationship. Consequently, all these companies need some level of support for advanced collaborative functionality, scalability, supply chain management (SCM), CRM, e-commerce/e-sourcing, and distributed computing environments. And they have to accomplish these feats with less (or completely without) IT staff and a much more limited budget compared to their bigger counterparts. For these reasons, the first generations of Tier 1 vendors' offerings for smaller enterprises have had only a limited success.
Still, a patient man may win the day, and the likes of SAP, PeopleSoft and Oracle will likely get it eventually right through their deep pockets-backed perseverance, their brand recognition, and repeated modifications and fine-tuning of their strategy to win the less chartered lower-end of the market. The latest above tacks should be regarded as prudent moves, although indisputably belated. Nonetheless, these moves should confirm these vendors' commitment to smaller customers through the renewed focus and better-attuned offering. A less known fact might be that almost two-third of all SAP's installations are enterprises with less than $500 million in revenues; PeopleSoft too deserves commendation for achieving its notable mid-market milestones (i.e., ~25% of all its customers are mid-market, whereby lately at least one out of every three new PeopleSoft customers reportedly also comes from this segment). For that reason, these moves should slowly alleviate the market perception of these solutions being overkill for smaller enterprises.
The fact that the mid-market and the SMB segment are the next frontiers and a promised land for all the enterprise vendors, small and large alike, has long not been news. Still, the willingness of smaller IT departments to go for more sophisticated technology beyond the all-too-common dispersed islands of information on Excel spreadsheets, Access-based reports and queries, or even managers' pocket paper-pads and post-it notes, does not guarantee any vendor an easy ride. That has been proven by a number of trials-and-errors, and consequent strategy reiterations that the larger enterprise vendors have espoused during last several years.
Look also for a continued evolution of these applications, since over the last several years the market has seen a plethora of fixed-scope and fixed-price applications, pre-packaged vertical solutions, attractive support programs and hosting services with catchy names (e.g., �Fast Forward', �Select', �Accelerated', �On Board', �Genesis', etc.), all aimed at making it faster, simpler and cheaper for enterprises under a few hundreds $ million to use them. However, all of these typically have also implied some form of trade-off in the name of expediency. The features forsaken will have been functionality, customizability, platform options, solution scalability or extensibility.
Unfortunately for both vendors and users, small and mid-size enterprises, like their bigger brethren, generally operate in a dynamic, competitive environment and have global, multi-site operations that are either wholly owned or that function in a complex supply chain relationship. Consequently, all these companies need some level of support for advanced collaborative functionality, scalability, supply chain management (SCM), CRM, e-commerce/e-sourcing, and distributed computing environments. And they have to accomplish these feats with less (or completely without) IT staff and a much more limited budget compared to their bigger counterparts. For these reasons, the first generations of Tier 1 vendors' offerings for smaller enterprises have had only a limited success.
Still, a patient man may win the day, and the likes of SAP, PeopleSoft and Oracle will likely get it eventually right through their deep pockets-backed perseverance, their brand recognition, and repeated modifications and fine-tuning of their strategy to win the less chartered lower-end of the market. The latest above tacks should be regarded as prudent moves, although indisputably belated. Nonetheless, these moves should confirm these vendors' commitment to smaller customers through the renewed focus and better-attuned offering. A less known fact might be that almost two-third of all SAP's installations are enterprises with less than $500 million in revenues; PeopleSoft too deserves commendation for achieving its notable mid-market milestones (i.e., ~25% of all its customers are mid-market, whereby lately at least one out of every three new PeopleSoft customers reportedly also comes from this segment). For that reason, these moves should slowly alleviate the market perception of these solutions being overkill for smaller enterprises.
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