Technology News
ERP Services Will Continue To Grow
(03/23/99, 11:51 a.m. ET)
By Scott Tiazkun, Computer Reseller News
SAN DIEGO -- ERP services will remain a strong market for the next few
years, letting ERP vendors and service providers forge new, and in many
cases, still undefined relationships, said speakers at Gartner Group's
Dataquest Predicts 99 conference here in San Diego.
The ERP market has experienced "unprecedented" growth for the past three
years, said Ben Pring, senior industry analyst with Gartner Group, in San
Jose, Calif.
While that level of growth "could not continue," there will be no major
long-term downturn for the market, he said.
"We see continued growth for ERP in vertical markets," he said. "There are
still industries that have barely been touched by ERP."
ERP and corresponding enterprise application software (EAS) have not reached
saturation level in the enterprise, he said. EAS encompasses "bolt-on"
software and new application functionality in addition to back-office ERP.
"There is an explosion of interest in a broader set of functionality ERP
hasn't addressed yet," said Pring.
Citing statistics that ERP software, as a percentage of all IT software,
accounts for only 18 percent, ERP has market horizons it has yet to tap, he
said.
Who will tap these markets, and the necessary corresponding services, is
becoming less clear, according to Pring.
While the overall ERP-EAS market is driven by the software vendors, Pring
said this creates advantages and disadvantages in the service market.
One of the areas of challenge the ERP vendors face is managing their
partners. The complexities of the product have opened both vendors and
partners up to criticisms that ERP is "painful and expensive," said Pring.
As a result, some ERP companies, notably SAP, in Walldorf, Germany, are
stepping into the firing line and attempting to manage their partners more
carefully.
Additionally, consultants and integrators will be under increased pressure
from software vendors, as they try to retain greater amounts of service
opportunities in-house.
These trends and competitive conditions will increase and complicate the
relationships that now exist, Pring said.
"Merely being an ERP service provider will not be enough," said Pring. "The
market place as a whole will be more challenging."
___________
The market that really matters is the anticipated growth in
demand for ERP services/applications and the market share
that ASI is capturing. Perhaps the market makers want to make
enough to pay for lunch, perhaps no one is willing to sell
their stock at these prices, etc., etc.
DRT
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