Top ERP predictions for 2011

Oracle, SAP, Microsoft and the rest are gearing up for big changes next year

Some aspects of the ERP (enterprise resource planning) software landscape, such as tired legacy code-bases and disastrous implementation projects, may never go away. But in recent years, the pace of change with ERP has accelerated, and there all signs are that will continue in 2011.

Here's a look at some of the likely outcomes for ERP next year, based on conversations with industry analysts, recent market data and a bit of gazing into the crystal ball.

ERP gets serious in the cloud

While ERP vendors have been making moves toward cloud computing for some years now, the situation will get serious in 2011 as customers demand that option, according to Frank Scavo, managing principal of the IT strategy firm Strativa.

"As cloud-based solutions for CRM, HR, and other functional areas gain market share, many ERP prospects will ask why they can't have their entire ERP suite in the cloud," he said via e-mail recently.

Some vendors are already trying to provide the cloud experience, simply by porting their software to public cloud services like Amazon's Elastic Compute Cloud or selling them via subscription, he said.

"But the real action will be with vendors that have built or re-engineered their products from the ground up to take full advantage of the capabilities of cloud-based computing, such as multi-tenancy and low-impact revision upgrades," he added. "As the economic recovery improves new deal flow, vendors who do not move beyond hosting will find themselves increasingly out of consideration."

And an Amazon-like option simply isn't enough, according to Forrester Research analyst Paul Hamerman. "Customers want a complete service offering that bundles vendor maintenance, application managed services, upgrades, hosting, and usage fees. Look for enterprise application vendors, and their services partner ecosystems, to deliver more comprehensive ERP deployment options," he said via e-mail.

The "game-changing technologies" for cloud-based ERP are PaaS (platform as a service) as well as BPM (business process management), which allow the extension and customization of cloud software, Hamerman added.

Third-party maintenance in limbo

The historic US$1.3 billion verdict Oracle recently won in its corporate-theft suit against SAP will have an impact next year on the market for third-party software maintenance, Hamerman predicted.

SAP admitted that its former TomorrowNow subsidiary made illegal downloads of Oracle software in the course of providing cut-rate support for Oracle customers. Oracle is also suing Rimini Street, another third-party support provider.

Third-party maintenance will "slow or go underground as litigation plays out," Hamerman said. But the rising cost of support will nonetheless prompt customers to consider alternatives, he added.

In lieu of that, vendors like SAP have an opportunity to "completely reinvent the game of ERP support" given the BI and analytics tools at their disposal, said Jon Reed, an independent analyst who closely tracks SAP. Such a system could charge customers based on the burden they place on SAP, rather than impose a flat percentage on all customers, regardless of need, Reed said.

Admittedly, this may be too visionary, since like all software vendors, SAP is heavily dependent on maintenance revenue.

But SAP in particular would be a notable company to lead such a movement, given the high-profile revolt its customers delivered in recent years over maintenance fee hikes.

Either way, SAP and other ERP vendors should prepare for customers to start looking for ways to reduce their maintenance spending, said Ray Wang, CEO and principal analyst of Constellation Research. They'll do this by getting rid of shelfware, canceling licenses and other means, he said.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags cloud computingenterprise resource planningIT managementMicrosoftinternetOraclesoftwareapplicationsSAPhardware systemsInforInternet-based applications and servicesYEAR END

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Chris Kanaracus

IDG News Service
Show Comments



Sansai 6-Outlet Power Board + 4-Port USB Charging Station

Learn more >



Back To Business Guide

Click for more ›

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?