Measuring Up: Turn Out the Lights, the Party's Over

By Sean Gallagher  |  Posted 2002-06-01 Email Print this article Print
 
 
 
 
 
 
 

According to analysts at business research firm AMR Research, sales of enterprise resource planning (ERP) systems have entered for the first time what may be a permanent period of decline.

Rumors of renewed economic growth haven't reached the enterprise software market. And according to analysts at business research firm AMR Research, sales of enterprise resource planning (ERP) systems—software suites that manage corporate finances, purchasing, orders and inventory—have entered for the first time what may be a permanent period of decline.

"We see negative to moderate growth for the whole enterprise software market," said Bruce Richardson, AMR's senior vice president of research, in a presentation at AMR's spring executive conference in Arizona last month. He added that he thought ERP sales could drop by as much as 2% over the next year alone.

That's at least partially because there aren't many customers left to sell to. Business software vendors like SAP, Oracle, PeopleSoft and J.D. Edwards have sold ERP systems to at least 70% of large organizations, according to Jim Sheperd, senior vice president and general manager of AMR's enterprise management service.

As a result, AMR sees an increasing percentage of ERP vendors' sales coming from what Sheperd calls "strategic extensions—add-on software for supply chain management, customer relationship management and business intelligence."

Vendors can't count on many sales to competitors' current customers, either.

And, customers seem to concur.

Says Al Strouken, CEO of specialty chemical company H.B. Fuller, "Any sane CEO only wants to go through one ERP deployment in his lifetime." Fuller elected to stick with its PRISM software, from defunct software maker Marcam, rather than face the prospect of another ERP deployment.



 
 
 
 
Sean Gallagher is editor of Ziff Davis Internet's enterprise verticals group. Previously, Gallagher was technology editor for Baseline, before joining Ziff Davis, he was editorial director of Fawcette Technical Publications' enterprise developer publications group, and the Labs managing editor of CMP's InformationWeek. A former naval officer and former systems integrator, Gallagher lives and works in Baltimore, Maryland.
 
 
 
 
 
 

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