Thursday, August 31, 2006

Oracle’s John Wookey on Fusion, SOA, and the Battle To Be No. 1(AMR)

We recently spent several hours with John Wookey, head of application development at Oracle. I usually describe him as having the most difficult job in Silicon Valley. Not only is he responsible for integrating the ever-expanding lineup of applications, his team is also developing the next generation of Fusion applications built on a service-oriented architecture.

SOA will kill off ERP says AMR (CMC - InsightExec)

The rapid adoption of web services and service-oriented architecture (SOAs) will lead to the end of enterprise resource planning market, according to research firm AMR.

With SAP and Oracle investing billions to web-service-enable their portfolios, but to date only a handful of deliverables have appeared. This delay could lead to customers deciding to seek functionality elsewhere.

"Here’s the doomsday scenario, circa 2010: SAP and Oracle customers have stopped buying applications from their ERP vendors. Instead, they contract with low-cost Indian or Eastern European integrators to build custom composite apps that sit on top of their ERP backbone," said AMR analyst Bruce Richardson.

Tuesday, August 29, 2006

Enterprise Applications Offer a Glimpse of Google's Ambitions (Gartner)

Google will introduce communications applications intended for use within enterprises. Service-level agreements, security and support will determine whether these applications will catch on within their target market.

Thursday, August 24, 2006

An In-Depth Look at Oracle's Retail Strategy: Don't Call It ERP (AMR)

“Should I go ERP or best of breed?” followed by “Should I go Oracle or SAP?” are probably the two main questions going through enterprise application buyers’ heads these days. Oracle wants to be the answer to both questions, but don’t expect to hear it trumpet the RP in ERP.

Wednesday, August 23, 2006

An SAP Retail Win (Line56)

New customer Beall's discusses what, in their opinion, makes SAP more attractive than Oracle and other retail e-business vendors

Monday, August 21, 2006

Tuesday, August 15, 2006

IBM Invests in Mainframe as 'Solutions Provider' (Gartner)

IBM has enhanced support for SAP applications on System z9. This new SAP partnership highlights IBM's mission to revolutionize and expand the mainframe platform.

Friday, August 11, 2006

Chordiant Software: Maneuvering in a Crowded Space (AMR)

Chordiant Software reported preliminary third quarter results on August 8. Revenue rose by 26% to $27.3M year to year. The company estimates that it posted a $3.0M net loss ($0.04 per share), compared with a $3.5M loss ($0.05 per share) in the prior-year period.

Thursday, August 10, 2006

For JDA, Both Opportunity and Challenge Lay Ahead (AMR)

JDA Software completed the acquisition of Manugistics on July 6, 2006, for $213M. A few days later, the company reported second quarter results of $51.8M in revenue, a 6% decline from the same quarter last year. Software license revenue fell 32% to $10.4M, driven in part by the focus on internal operations, including the Manugistics acquisition.

Tuesday, August 08, 2006

Infor Acquires Extensity (Line56)

The buying spree continues; thinking about the looming duplicate functionality challenge

Infor, the enterprise applications company that recently acquired SSA Global, has now acquired Extensity and, by default, Systems Union, a company recently acquired by Extensity.

Both Extensity and Systems Union specialize in different aspects of financial software, with Extensity holding a niche in financial performance management software and Systems Union having a broader applications portfolio.

Friday, August 04, 2006

IBM Acquires MRO Software for $740M, but at What Cost? (AMR)

IBM is acquiring MRO Software in an all-cash transaction priced at $740M, or $25.80 per share. This is a 19.4% premium over MRO Software’s closing price of $21.60 on August 2; MRO’s stock price closed at $25.46 on the day the deal was announced.

More Free ERP (Line56)

Here's another list of free enterprise resource planning (ERP)
products that could be of big interest to small companies

Wednesday, August 02, 2006

Market Consolidation Contributes to Robust Quarterly PLM Performance (AMR)

PLM is seeing some strong quarterly earnings from its vendors. It also shows that the leaders are performing above the overall market growth, partially due to the consolidation taking place as this space matures. Vendors deriving from a legacy in CAD are the front-runners as manufacturers refocus on connecting design innovation to the broader cross-functional new product introduction (NPI) team.

PLM quarterly performance to date

Total revenue for Dassault Systemes was Euro 280M in 2Q06 versus Euro 217.3M the previous year, resulting in 29% GAAP revenue growth. Excluding recent acquisitions, total growth was approximately 10%, with MatrixOne contributing Euro 17.8M and Abaqus Euro 23.2M. The midmarket continues to show strength, with SolidWorks 3D CAD revenue reaching 20% growth.

PTC reported 3Q06 revenue of $216.7M versus $180.3M the prior year for a 20% increase in total revenue. Based on historical revenue, AMR Research estimates the Arbortext and MathSoft acquisitions contributed roughly $15M, resulting in an estimated 12% organic growth. PTC said acquisitions will continue to be an important part of its growth strategy of reaching $1B in revenue by 2008. Channel partners targeting the midmarket continue to be an important component, contributing roughly 21% of total revenue.

PTC and Dassault total revenue are well ahead of AMR Research estimates of total PLM market growth of 10% through 2006. However, they also reflect the dynamics of a consolidating PLM market, where organic growth is more in line with estimated total market growth. And they reflect a current trend toward PLM dominance by vendors with a legacy in CAD, as ERP vendors like SAP experience flat growth in their PLM applications.

Up next this quarter
UGS and Autodesk are still due to report numbers this quarter. Autodesk is in an excellent position to continue growth within manufacturing as midmarket manufacturer’s upgrade to 3D CAD; though expect them to see competitive pressure given the aggressive targeting of this market by Dassault, PTC, and UGS. Autodesk still depends heavily on the CAD and computer-aided-engineering (CAE) revenue given its limited presence in broader non-CAD PLM applications.

UGS’s momentum should continue given the endorsements from major customers, including Boeing and Ford for enterprise data management and embedded software. UGS has also made progress in new industries like apparel, but still depends heavily on its core industries of aerospace and defense and automotive for major revenue.

Agile Software will report numbers later this quarter, and remains the sole major independent PLM provider. It has experienced single-digit growth in recent quarters, struggling to meet its goals. The recent Prodika acquisition, while not adding huge revenue at roughly $5M per year, positions Agile well in the expanding food and beverage process industry against the CAD-centric providers. Agile must build momentum in these industries to distinguish itself from the bigger players, as well as expand its footprint within the typical stronghold of high tech.

Manufacturers continue to invest in speeding innovation to market for their own growth. To support this, they want to use existing investments in applications like CAD or ERP. For now, this is especially good news for design-oriented application providers as the pendulum swings from operational efficiency to innovation. However, effective innovation that returns a business benefit is the end goal, so expect manufacturers to continue to identify those NPI processes that result in the most success and the applications that best support their primary business pain.