E-Business Winners and Losers: Applications and Commerce
E-Biz 150
February 15, 2000
(Skip to the rankings.)
In 1999 efficiency-oriented investments in back-office ERP and financial systems went quickly out of style as CRM moved in. And this battle moved
rapidly to the Internet. Why? Because increasingly that's where the customers are going: the Yankee Group forecasts that much of this transition to
the Web will take place over the next 24 months.
A few other big buzzwords also became popular last year. First of all, the business-to-business sector has served up a bumper crop
of blockbuster IPOs in terms of both application systems and e-market offerings. And of course, there is much hype -- although
precious few customers as yet -- around the whole "software to services" transition as application service providers (ASPs) change
the entire software business model.
Over the past three years, we have seen an explosion in the number of business models that define how software companies
operate and compete. Some of the new models -- such as ASPs with software rental, digital marketplaces with procurement functions, and online
apps served to users through a Web site -- result in companies that are not generally recognizable as "software developers"; indeed, the newcomers
may not identify their new ventures as software companies.
Examples of the new breed include Internet market makers like Chemdex and MetalSite, as well as portals such as Works.com and MySAP.com.
Yet these sites can, and probably will, develop into companies that deliver application functions for businesses and consumers -- challenging or
replacing some types of software sold and installed in the traditional way.
The big question remains whether the ASP phenomenon is a passing fad, or if we are seeing the first Amazon.com scenario for the software industry.
Will traditional software companies, their salespeople, and channels be challenged by online portals selling similar functionality on a per-click basis?
Perhaps. But don't discount the strength of the incumbent heavyweights, particularly those in the ERP and CRM markets. These companies are
bouncing back with their own online strategies. Newcomers may find them tough to beat.
Contributors: Robert Mirani, Chris Selland, Harry Tse, and Lisa Williams
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E-Business Winners and Losers: Applications and Commerce
page 2: Buzzword Kings
SAP ****
Market Share: 4
Innovation: 4
Overseas Strength: 5
Alliances : 3
Growth: 4
SAP, the leading ERP vendor, is used to having a target on its back, but now the tables have turned. It lags in emerging areas such as CRM and
electronic commerce. Money helps, but time is the larger concern here. Nonetheless, with Y2K concerns having faded, SAP's core business should
pick up, giving the company a window of opportunity to regain lost ground. Never count this giant out, particularly given its dominant market share and
customers determined to maximize ROI on some very heavy investments.
Ralf |
