Two little quote-toids (that's a factoid quoting someone) crossed my desk May 4 that make me think ERP is going to be around for a long time. The boss at Panorama is saying:
"Even after 15 years in the ERP consulting industry, I am still amazed by how many companies have trouble with their business processes or suffer from organizational change management issues, but blame the (ERP) software instead."
And, according to Larry Dignan, the CEO of NetSuite (N) said on April 28:
“CIOs are loathe to throw out legacy ERP..."
Perhaps -- like Osama bin Laden -- the reason ERP is so hard to kill is that ERP is out there hiding in the enterprise in plain sight.
From an investment perspective this is good news for incumbent ERP players -- primarily Infor, Oracle (ORCL) and SAP -- and bad news for the likes of NetSuite, which according to the Dignan ZNet article just can't seem to get any real traction behind its ASP-to-OSB-to-ERP-to-CRM-to-Cloud tactical changes over the last 15 years. (NOTE: OSB has nothing to do with Osama but refers to NetSuite's period as Oracle Small Business ERP product early in the last decade.)
Not that I'd recommend a play on Oracle or SAP based on their ERP lines but these quotetoids indicate that Oracle's and SAP's ERP cash cows are protected as the two companies (numbers three and four in the software market respectively depending on how you rank IBM vis a vis Oracle) continue their respective diversifications. The investment play for the two is a matter of which way you think SAP is going to grow (if you so think) and how well you think the Oracle entry into the systems business will work out (if at all).
As for Infor, you can't invest in them anyways. But with the addition of Lawson last month and who knows who next, Infor doesn't have a cash cow. It has a whole dairy.
-- Dennis Byron