ERP – end of life?

A couple of observations I am seeing about the state of the ERP market – is it now end-of-life?

I have noticed in more than one ERP vendor’s VAR/dealer list that there seems to be consolidation now in the VAR space. The larger ones are able to get business easier by virtue of their name and presence, and have a better guarantee of revenue from their existing customer base, which is usually large. Smaller VARs don’t have such a name or presence for getting new business, and their smaller number of customers means they can’t rely on annuity revenue so much.

The other observation comes from two recent blogs – by Joshua Greenbaum and Vinnie Mirchandani. Vinnie calls the growth of Indian ERP services an end of life phenomenon, Josh refers to the ‘mistaken’ hype around the SMB market for ERP.

My Syspro contact believes that the big ERP vendors over-estimate the ERP SMB market potential, and will not be able to earn sufficient revenue, given their enormous size, to make it profitable for them. For a smaller SMB ERP vendor, $10 million from new business is good annual revenue, for SAP it hardly registers.

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3 thoughts on “ERP – end of life?

  1. eol does not need to mean end of market…just means pricing needs to better reflect maturity…most markets are bell curves…competitive pricing to get new products adopted, better pricing to get eol products continue to be viable. A CFO client at a fashion compnay once marveled at ERP pricing – saying he wished he could get 10% of prices after a year of intro…

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