Hi Bob,
Here's an article from CNET. Mentions JDEC but the main emphasis is on ORCL with PSFT and SAP doing so-so and Baan the clear loser.
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Is the enterprise resource planning market dead?
By Melanie Austria Farmer and Kim Girard
Staff Writers, CNET News.com
January 4, 2000, 1:05 p.m. PT
URL: news.cnet.com
year in review Oracle CEO Larry Ellison may have been right on the mark when he said the enterprise software market as Wall Street and corporate America know it is dead.
That's why Oracle--a database giant that also makes enterprise resource planning (ERP) software--may get the last laugh. At the end of 1999, it wasn't German ERP software giant SAP that was grabbing headlines, but Oracle--as the company unveiled its business-to-business e-commerce software strategy to Wall Street and watched its stock fly and its market value rise to nearly $155 billion. Meanwhile, SAP launched its "City of E" marketing campaign and put on a full-court advertising press to reposition the company as a B2B player.
Analysts say while the ERP market isn't completely dead, it has certainly slowed as business software makers, including SAP, Baan, J.D. Edwards and PeopleSoft, shifted their focus to the Internet to try to replicate the wild success of business-to-business software makers Ariba and Commerce One, companies that make applications that help businesses buy and sell goods and services online.
"The biggest surprise in the market (in 1999) was that it met everybody's expectations as a dismal year--clearly it was," said Bruce Richardson, analyst at AMR Research in Boston. "The huge debate internally is as to when--if ever--the ERP market will turn around."
Clearly, several top ERP companies are suffering a Y2K hangover after a 1999 hammering. Baan today issued yet another warning that its losses would be wider than expected as its CEO Mary Coleman quit after just seven months on the job. In October, SAP, the world's largest ERP software maker, reported its third-quarter profit fell 64 percent on lower licensing fees. Profit for the period dropped to $48.6 million from $134.74 million a year earlier. Meanwhile, PeopleSoft last October saw its net income for the third quarter dive to just $5.2 million from $44.2 million a year earlier.
But none of these companies are standing still. ERP software firms have roots in developing client-server applications that companies use to track their finances, human resources, logistics and other business needs. Now, they are scrambling to add software that connects companies to their customers, business partners and suppliers over the Internet.
"In some respects, everybody has to come back as a B2B company or they don't make it in this world," said Rob Kugel, a financial analyst at FAC/Equities who follows the ERP market. "(The B2B market has) gone from being a marketing boast to a checklist requirement."
But for companies such as Baan, it's unclear whether these transformation efforts are coming too late.
"They have stumbled so badly in this past year that the loss of momentum makes it doubly difficult for them to regain market share," Kugel said.
During the first half of the year, ERP companies blamed Year 2000 concerns for disappointing financial results, arguing that customers would most likely wait until after the millennium passed before upgrading existing ERP systems or installing new ones. But as the year pressed on, it became clear that financial problems spanned beyond Y2K. With the exception of Redwood Shores, Calif.-based Oracle, which is largely a database software company, the top ERP companies reported a significant slump in software sales.
1999 marked a time for serious changes within ERP companies that have been struggling to reinvent themselves for the Net, faced with plummeting financial results. Companies shifted research and development efforts to the Internet, announcing intentions to release Web-friendly applications.
Analysts say ERP players have been successful in shifting their vision and message to the Net, but question if the leaders will make their mark in 2000.
"This was the year that client-server software companies began their transformation to the Internet to become Internet companies, and it's still open to question how successful they will be," said Rob Kugel, a financial analyst at FAC/Equities.
Oracle and SAP, he added, are ahead in their abilities to nab mind share and in their push to broaden out their product and services reach.
Both companies have been battling on several fronts, such as in the customer relationship management software (CRM) market for applications that automate a company's sales, marketing and call center needs. Both companies are also marketing business-to-business (B2B) e-commerce software, which enables companies to buy and sell goods online; and Oracle has forged ahead in the application service provider (ASP) market, which allows companies to rent expensive business applications on a hosted, per-user/per-month basis.
Meanwhile, analysts have criticized both PeopleSoft and Baan for lagging with their Net efforts. Both companies have struggled with sales force problems, company-wide reorganizations, executive turnover and financial shortfalls in the past year.
But moving toward a recovery, Pleasanton, Calif.-based PeopleSoft bought Vantive in October in a deal worth $433 million. The move was applauded by industry observers partly because it finally gave PeopleSoft a sales and marketing software strategy.
Despite PeopleSoft's efforts, Joshua Greenbaum, an industry analyst who heads Enterprise Applications Consulting in Berkeley, Calif., said that Oracle and SAP are clearly leading the race.
"Certainly Oracle is winning the mind share battle and has the broadest product offering in the market," said Greenbaum. "SAP (with its mySAP.com strategy) has definitely caught up with them. It gets a little slippery from that point on as a number of companies haven't delivered in the market."
Greenbaum added, "All of these companies went to the wall in 1999 financially. It was a pretty ugly year, but the prospect of an e-commerce or e-business space are making them all look pretty good again."
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