Common Market Trends Emerge As More ERP Vendors Bet On SaaS ERP

In the Business Apps Casino, change is afoot. For a long time, one table – software-as-a-service ERP – attracted a limited number of players and fans. However, over the past 12 months, an increasing number of ERP vendors have lined up to place sizeable SaaS bets, while more potential customers are paying close attention to the gambles those vendors are making.

In Forrester ERP inquiries, it’s now the norm for clients to ask us about SaaS ERP. In fact, it’s unusual to field a call where SaaS isn’t mentioned. Firms may be actively considering a future change in deployment model or simply wanting to kick the tires on SaaS ERP adoption, pros and cons, and comparisons with on-premises ERP. They also seek more information about SaaS ERP market players and likely future entrants. In general, what’s changed since a year ago is that companies want to include SaaS ERP options in their assessments.

Each ERP vendor’s SaaS bet differs somewhat from those of its peers, determined both by the type of customers it’s aiming at and architectural concerns. However, there are some shared themes:

  • Repurposing existing apps. Some ERP vendors began their SaaS endeavors with apps targeted at small and midsize businesses. They’re now working to deepen the functionality of those apps to appeal to a broader, more enterprise audience. There are two key approaches: 1) expand the scope of an existing SMB product and aim it up market; or 2) carve off functionality from a SaaS midmarket apps suite (while retaining that suite) and create a new enterprise app.
  • Determining infrastructure options. When going SaaS, ERP vendors are choosing whether or not they want to play in markets other than apps, such as platform-as-a-service (by packaging up their in-house development platform) or integration-as-a-service (by building or acquiring an integration business). Alternatively, vendors may opt to rely on third-party PaaS and integration. If a vendor fields several ERP products, all of which they want to make available as SaaS, they may decide on a variety of PaaS partnerships.
  • Establishing an apps showcase. Once they have a SaaS app, ERP vendors are looking for ways to create an ecosystem around that product. They’re experimenting with app stores as a way of demonstrating extensibility for their SaaS ERP with free or paid complementary add-ons and apps provided by the vendor itself, its partners, and its customers.
  • Buying in SaaS products and expertise. Some ERP vendors have acquired SaaS apps in areas where they either lacked a SaaS offering or where they previously didn’t have a strong presence with their own product. With such purchases, the ERP vendor also gains staff with existing knowledge and experience of SaaS sales, marketing, and support, which are essential to help drive customer adoption of SaaS ERP.

What do you think? Are these some of the common trends you're seeing emerging in the SaaS ERP arena? Looking forward to hearing from you.

Comments

SAAS Trends

Interesting to note that SaaS is slowly coming mainstream. In the SMB space, where we have been operating since 2008, we have seen a very gradual increase in acceptance for SaaS products. Questions on security and privacy are no longer as important as they used to be. I think customers are beginning to understand the trade-off between security and ease of management.

Having said that, I still think it is early days. SaaS ERP products are still not as mature as the traditional ones and ERPs are products with a long product cycle and the market is still has mostly early adopters. Another observation is that the early adopters are taking advantage of the SaaS pricing and just "trying out" before making a decision. So one must take the number of users disclosed by SaaS vendors with a pinch of salt.

The next evolution of ERP - Adaptive ERP

With the initial release of ERP, one of the key “game changers” was the ability of business users to access data and generates reports without direct IT involvement. This empowerment of the business user had a significant impact on business agility. Today, we continue to see ERP vendors focus on providing business-friendly tools for reporting and analysis. Yet, I can see a new evolution brewing in the ERP industry what I like to call “Adaptive ERP” where business users can perform on-demand actions to meet business changes real-time. In the next sections we discuss the key capabilities of Adaptive ERP and a practical assessment of where the ERP industry is today.

http://gbeaubouef.wordpress.com/2012/09/05/adaptive-erp/

ERP - Rocking

I think about that the best web based Enterprise Resource Planning (ERP) software as a service (SaaS) ERP, it will rocking in future.

Patricia Hall - Mobile Application Development India

Competition is healthy

I feel this competition is good and it will generate quality products. As a SaaS ERP developer , I enjoy this competition for my company and team's growth and because of this competition our clients are demanding more so that we serve our erp clients better and best