Is SAP sapping out the Competition ?
Late 2007 ERP Vendors Market Share
For 2007, SAP had 48 % market share followed by ORACLE with 25 % & Microsoft with 12 %. It is interesting that the 2nd & 3rd Players have market share that is exact half of the Company above them. (6th January 2009).
Is SAP sapping out energies of a lot of competitors in the ERP (Enterprise Resource Planning) Software space ? (25th January 2005).
With SAP's reported figure of 38% market share in the US and a 60% market share in India a couple of years ago, it does seem so.
However, Microsoft is gunning for it with a target of US $ 10 Billion Revenue from ERP Business. (even though interestingly, it uses SAP for it's own internal operations, or atleast used to, last when I heard). So is Oracle (a very bulky Oracle after having digested Siebel and Peoplesoft who in turn had digested JD Edwards earlier).
And many other ERP Players. Large and Small. Global, National and Regional Players. As per SAP, (not confirmed independently), in India the market shares of various ERP vendors a couple of years ago was :
SAP - 60 %
Oracle ( including Peoplesoft and JD Edwards) - 10 %
Ramco - 5 %
SSA-Baan - 4 %
QAD - 3 %
Others - 18 %
The above ERP market shares in India indicate that the ERP marketplace is set for a consolidation in the near future.
Also, in the case of ERP packages, the prices are dropping rapidly Year On Year.
So, you get a Mercedes or a Rolls Royce at the price level of perhaps a Toyota.
Hence, stability and survial of the vendor becomes very important.
Specially after the Oracle takeover of Peoplesoft.
When you have Peoplesoft Velocirapting JDE and in turn ORACLE trying to Velocirapt Peoplesoft, besides giving body pains to the respective ERP vendors, it will also give their respective customers an uncertain worrisome time ahead.
Does any vendor (even as large as ORACLE) have the resources to maintain the code bases and support for three separate ERP product lines ?
It will take them a lot of time and people resources.
Oracle's proposed 'Super Set' of their ERP packages seems to be like a magic Cure For All Pains pill.
Especially when SSA-Global's MD in India promised of plunging ERP prices in the future.
When an organization is banking it's entire future for the next 20+ years (presumably) on an ERP solution, it makes sense to be able to work with a vendor who will be atleast alive till then and itself not be velocirapted.
In situations such as these when the entire ERP market is consolidating, customers become cautious.
Since they do not want to bet on the wrong horse & risk the future of their organizations and their careers.
Remember we are talking of Customers having invested years and (sometimes decades) of efforts in JD Edwards and Peoplesoft ERP Systems.
It will take tons of effort and resources to switch platforms, which they will ultimately have to do since Oracle will naturally want them to do so.
It would be extremely interesting to see how far this battle saps (sorry, shapes) out.
My guess is that it may not have much of an impact on SAP.
Probably, it makes SAP's position stronger as there will be less confusion in the minds of customers.
Maybe SAP has got the Magic Keys to the ERP Marketplace.
With varying products for distinct market segments.
Or perhaps, their Roots are right. (Sapping away energies from others on the ground.)
Watch this (SAP) space surely without getting sapped.
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