In 2012, the global Enterprise Resource Planning (ERP) applications market grew 3.6% to approach nearly $36 billion in license, maintenance and subscription revenues, slightly above our previous projection.
In 2011 our projection called for a 3.1% growth for 2012 and the better-than-expected results was attributed to an improving economy, coupled with increased adoptions of Cloud-based ERP applications.
Last year SAP led the pack with 20.8% market share with $7.5 billion in ERP product revenues, riding on a 9.2% jump in license, maintenance and subscription revenues. Oracle was No. 2 achieving 11.7% share, Infor was the third at 4% and Sage and Microsoft were tied at the fourth place with 3.8% each.
Top 100 ERP Software Vendors
Here are the rankings of the top 100 ERP Software vendors and their market shares in 2012.
|Rank 2012||Vendor||Software 2012 Revenues, $M, USD||Market Share 2012%|
|14||Jack Henry & Associates||358||1.00%|
|18||Medical Information Technology||298||0.80%|
|20||Yonyou Software Co., Ltd.,||280||0.80%|
|24||JDA Software Group, Inc.||235||0.70%|
|30||Reynolds and Reynolds||208||0.60%|
|31||Quality Systems, Inc.||203||0.60%|
|32||Aderant Holdings, Inc.||200||0.60%|
|35||Vitera Healthcare Solutions||200||0.60%|
|40||Aspen Technology, Inc.||166||0.50%|
|44||Applied Systems Inc.||150||0.40%|
|45||HealthTech Holdings Inc.||150||0.40%|
|49||ACI Worldwide, Inc.||118||0.30%|
|50||SunGard Public Sector||115||0.30%|
|52||Computer Programs and Systems Inc||105||0.30%|
|56||Advanced Computer Software||82||0.20%|
|58||IBS Software Services||80||0.20%|
|62||P2 Energy Solutions||70||0.20%|
|68||New World Systems||65||0.20%|
|71||Passport Health Communication Inc.||60||0.20%|
|74||CCC Information Services Group Inc.||52||0.10%|
|76||Upland Software, Inc.||50||0.10%|
|78||Plex Systems Inc||48||0.10%|
|84||TriTech Software Systems||45||0.10%|
|85||InterAct Public Safety Systems||44||0.10%|
|86||Follett Software Company||41||0.10%|
|87||Origin Healthcare Solutions||41||0.10%|
|92||Abas Business Software||36||0.10%|
|96||Greenway Medical Technologies||32||0.10%|
|99||Construction Industry Solutions Corp.||30||0.10%|
|100||NexTech Systems Inc.||30||0.10%|
Source: Apps Run The World
Workday posted 118% jump in ERP applications revenues in 2012, buoyed by growing acceptance of its Cloud-based financials and HCM software. The steep rise solidified the positioning of Workday, which became the fastest-growing ERP applications vendor last year.
Aspen Technology, Upland Software (formerly PowerSteering), SS&C and Ventyx also were among the fastest-growing ERP applications vendors due to their solid results as well as acquisitions they made last year. Here are the 10 ERP applications vendors that grew the most in 2012.
|Vendor||2012 ERP Applications Product Revenue Growth Rate, %|
|Aspen Technology, Inc.||61.20%|
|Upland Software, Inc.||56.30%|
|Applied Systems Inc.||37.60%|
|Aderant Holdings, Inc.||33.30%|
We are working on the update of the Top 100 ERP vendors and that report will be published shortly.
After the storm passes, the siren comes. That perhaps sums up the state of the ERP applications market as it readies another roller-coaster ride following the end of the financial crisis. This applications market sizing report focuses on the 2012 performance of the leading vendors in the worldwide enterprise resource planning applications market.
The good news is that most vendors have weathered the storm pretty well, leaving them with a solid base of recurring revenues as well as new sources of growth in horizontal and vertical markets. The bad news is that companies are demanding greater returns on their ERP investments. Companies that used to be spending tens of millions of dollars on ERP projects are shifting their investment plans to more tactical solutions, mostly via the Cloud to eliminate upfront license costs.
Others that are stuck with multiple ERP systems and the associated maintenance agreements have begun to rationalize their IT environment in favor of simplifying their technology stack or in some cases taking on a shared service approach, either of which is bound to hurt certain ERP vendors.
As a result, the balancing act for most vendors is to maintain the status quo for as long as possible, while making the necessary adjustment in order to take advantage of the new world of software consumption.
Another source of uncertainty lies in developing countries such as Brazil, China, and Russia, all of which have been showing signs of deceleration.
Whatever the case, the ERP market, which in some cases is regaining its momentum after a long recession and a consolidation wave, is entering uncharted territory with terrain that is more treacherous than ever.
Top Line and Bottom Line
On the top line, the ERP applications market has begun to diverge into core vs. edge. Some of the vendors such as QSII and McKesson have seen decelerating growth with their core ERP offerings, while edge products usually delivered via the Cloud have enjoyed growing adoptions among customers.
After more than six years of development, the Fusion ERP applications from Oracle have started gaining traction. According to the vendor, it has picked up more than 400 customers for its Fusion applications with many deploying Financials and HCM modules in the Cloud.
Similarly, vendors such as AthenaHealth, NetSuite and Workday have seen their Cloud applications revenues skyrocket over the past year surpassing the growth rates of counterparts in the on-premise world. Workday, for example, saw its Cloud-based revenues jump 118% to $181 million in 2012.
The trend is expected to continue as on-premise ERP vendors ramp up their Cloud-based offerings, while Cloud-savvy providers seek to consolidate their gain through a smattering of global partnerships and strategic alliances.
For instance, Sage, the No. 4 ERP vendor that has been mostly selling on-premise packages, recently announced a slew of add-on capabilities including Mobile services and Mobile sales capabilities, both of which will be made available through Azure, the Cloud-based platform from Microsoft. Sage is also wooing other Cloud-based ISVs to deliver their Web services through SageExchange.com, the Web-based portal for Sage’s two million customers in North America.
It remains to be seen how these partnerships are going to reshape the global ERP market. Yonyou, the leading Chinese ERP vendor formerly known as UFIDA, announced a deal in 2011 with Atos, the French IT consulting firm, to take its software around the world under Yunano, a joint venture.
Yunano is expected to help Yonyou sell Cloud applications to customers in Asia Pacific via Canopy, which is the Cloud service provider created by Atos with the help of EMC and VMware. According to Yunano’s website, it has more than 1.5 million customers. It is not clear how many of these Yunano customers are also long-time users of Yonyou, whose customer count has also exceeded 1.5 million.
On the other hand, countries such as Australia, China and Russia that used to drive the growth of a wide swath of ERP vendors have been cited as key reasons behind the recent slowdown. Even TOTVS, the high-flying ERP vendor in Brazil, has lost some of its luster in recent months.
For the first quarter of 2013, TOTVS saw a 2% drop in license revenues following a 22% decline in average selling prices to new clients. Number of new clients added in first quarter of 2013 also fell 6%.
Coincidentally the deceleration is coming on the heels of new economic measures expected from central bankers, namely the move to end regular purchases of government bonds under the quantitative easing policy by the US Federal Reserve, which has been instrumental in reviving the domestic economy with ultra-low interest rates.
As with many big-ticket purchases, ERP systems have benefited from such easy credit that has fueled the investment boom around the globe, tempting CFOs and line-of-business executives to either issue new corporate debt or ratchet up capital spending over the past few years. If a more risk-adverse climate becomes the norm as seen in the cooling down of economic engines in places like China and Brazil, ERP vendors could be in for a rude awakening just as their migration to the Cloud is taking shape.
ERP Market Definition and Forecast
The market for enterprise resource planning applications is defined as follows:
Integrated applications suites designed to automate a range of business processes from back-office operations to financial management and from sales distribution to customer information management within a vertical or across multiple industries.
The graphical display in our taxonomy section helps explain the ERP components from both horizontal and vertical perspectives.
For the full listing of the top 100 ERP applications vendor, please follow this link to the summary report on their 2011 and 2012 revenues, 2012 vendor shares as well as their profiles based on our SCORES methodology. Here’s the aggregated view of the 2012 performance of the top 100 ERP applications vendors and their combined market share.
|2011||2012||Percentage of Total|
|Combined ERP Product Revenues of Top 100 Vendors, $M||27109||29957||83.20%|
Source: Apps Run The World
Through 2017, the ERP applications market is expected to reach $44.18 billion by 2017, compared with $35.9 billion in 2012 at a compound annual growth rate of 4.2%, as shown in the following table.
|Worldwide ERP Applications Market, $M||33683||34749||35997||37250||38684||40333||42255||44188||4.20%|
|Year to year growth, %||3.20%||3.60%||3.50%||3.80%||4.30%||4.80%||4.60%|
Source: Apps Run The World
Much of the growth will be driven by the rise of Cloud-based ERP systems and their associated subscription revenues. License and maintenance revenues are expected to show little or no growth through the forecast period.
In terms of regional spending patterns, Asia Pacific will continue to outpace EMEA and North America as large and small enterprises are increasing their IT budgets in order to stay competitive by shoring up their financial, procurement, HR and other integrated systems for improved efficiency and greater insights into their global operations. The same bullish sentiments can also be found in Latin America and Africa.
Additional market forecast by customer size, country and industry will be released separately. Ad hoc inquiries about these data cuts can be directed to Apps Run ERP as well.
|Vendor||Customer Win||Industry||No. of employees||Revenue, $M||Old Product||New Product||Wins in|
|Cerner Corporation||Baptist Health South Florida||Hospital & Health Care||15000||2280||Siemens Soarian||Cerner Millennium||3Q15|
|Cerner Corporation||Boca Raton Regional Hospital||Hospital & Health Care||2100||430||McKesson Horizon Clinicals, McKesson core||Cerner Clinical and Financial IT System||2Q16|
|Cerner Corporation||Centra||Hospital & Health Care||6400||700||McKesson||Cerner Millennium||2Q16|
|Cerner Corporation||Good Shepherd Rehabilitation Network (GSRN)||Hospital & Health Care||2010||140||McKesson||Cerner Millennium||2Q16|
|Cerner Corporation||IASIS Healthcare||Hospital & Health Care||13400||2800||McKesson||Cerner Clinical and Financial IT System||4Q15|
|Cerner Corporation||Kaiser Permanente||Hospital & Health Care||189302||60700||Sunquest LIS||Cerner Millennium||4Q15|
|Cerner Corporation||Lake Health||Hospital & Health Care||3500||1200||Siemens Soarian||Cerner Millennium||2Q16|
|Cerner Corporation||McLaren Health Care||Hospital & Health Care||22000||3500||McKesson, Allscripts||Cerner Millennium||4Q15|
|Cerner Corporation||Missouri Delta Medical Center||Hospital & Health Care||900||87||Siemens Soarian||Cerner Millennium||2Q16|
|Cerner Corporation||Sarah Bush Lincoln Health Center||Hospital & Health Care||2200||250||Meditech||Cerner Millennium||1Q16|
|Cerner Corporation||SoutheastHEALTH||Hospital & Health Care||1200||290||Siemens Soarian, Nextgen||Cerner Millennium||2Q16|
|Cerner Corporation||Tift Regional Health System (TRHS)||Hospital & Health Care||2010||350||McKesson||Cerner Millennium||2Q16|
|Cerner Corporation||UHS||Hospital & Health Care||70000||9043||Siemens Invision||Cerner Millennium||2Q16|
|Cerner Corporation||University of South Alabama Health System||Hospital & Health Care||3600||400||Siemens Soarian||Cerner Millennium||2Q15|
|Cerner Corporation||Western Connecticut Health||Hospital & Health Care||4354||1100||Siemens Soarian||Cerner Millennium||3Q15|
|Epicor||ESP Group||Information Services||200||25||Legacy System||Epicor ERP||2Q16|
|Epicor||Nature’s Choice||Health, Wellness and Fitness||50||5||Legacy System||Epicor ERP||1Q16|
|Epicor||PureMalt Products Ltd||Food & Beverages||70||7||Legacy System||Epicor ERP||1Q16|
|Ericsson||Swisscom||Telecom.||21637||11860||Legacy System||Ericsson Cloud Manager||1Q16|
|Ericsson||Telefónica||Telecom.||125000||11950||Legacy System||Ericsson Cloud Manager||1Q16|
|FIS Global||CIT||Banking and Financial Services||4740||2890||Jack Henry & Associates||FIS IBS Core Processing Platform||4Q15|
|FIS Global||Citizens Bank||Banking and Financial Services||17900||4530||In-House Legacy System||FIS Core Banking||2Q16|
|FIS Global||Dallas Capital Bank||Banking and Financial Services||50||5||Legacy System||FIS Digital Banking||1Q16|
|FIS Global||Emprise Bank||Banking and Financial Services||500||70||Fiserv||FIS Core Banking||1Q16|
|FIS Global||Evans Bank||Banking and Financial Services||220||25||In-House Legacy System||FIS Core Banking||2Q15|
|FIS Global||Landmark Bank||Banking and Financial Services||700||130||Fiserv||FIS Digital Banking||4Q15|
|FIS Global||Los Alamos National Bank||Banking and Financial Services||310||45||In-House Legacy System||FIS Core Banking||4Q15|
|FIS Global||National Bank Holdings||Banking and Financial Services||956||162||Legacy System||FIS Core Banking||3Q15|
|FIS Global||State Bank of India||Banking and Financial Services||222033||38000||Tata Consultancy Services (TCS) BaNCS Core Banking||FIS Core Banking||1Q16|
|FIS Global||Westwood Holdings Group Inc.||Investment Management||130||170||Infovisa||FIS Core Banking||4Q15|
|Fiserv||Bank of Ceylon||Banking and Financial Services||7980||910||Fiserv ICBS||Signature core account processing platform and Teller front-end teller system from Fiserv||1Q16|
|Fiserv||Intracoastal Bank||Banking and Financial Services||40||4||Legacy System||Fiserv Mobiliti Business Mobile Banking||2Q16|
|Fiserv||Me/CU||Banking and Financial Services||40||4||Legacy System||Portico for core account processing, Virtual Branch for online banking, Mobiliti for mobile banking, Mobile Source Capture for mobile deposits, CheckFree RXP for electronic payments, Loancierge for lending automation, Wisdom for accounting and call report functionality, and solutions for card processing and production.||2Q16|
|Fiserv||Neighbors Federal Credit Union||Banking and Financial Services||250||30||Legacy System||DNA account processing platform||1Q16|
|Fiserv||Tandem Bank||Banking and Financial Services||100||35||Legacy System||Agiliti||1Q16|
|Fiserv||Texas Dow Employees Credit Union||Banking and Financial Services||700||110||Q2 eBanking||DNA account processing platform||1Q16|
|Fiserv||Thrivent Federal Credit Union||Banking and Financial Services||140||25||Legacy System||DNA account processing platform||1Q16|
|Fiserv||Unity Bank Plc||Banking and Financial Services||2100||60||Legacy System||Corillian Online||1Q16|
|Fiserv||Vibrant Credit Union||Banking and Financial Services||160||26||Jack Henry & Associates||DNA Account Processing Platform||1Q16|
|Fiserv||Welch State Bank||Banking and Financial Services||70||7||Nicola Banking System||Precision core account processing platform||2Q16|
|Infor||AmerisourceBergen||Hospital & Health Care||18000||135000||Baan ERP||Infor LN||4Q15|
|Infor||Bakers AS||Food Production||3000||1900||Legacy System||Infor M3||4Q15|
|Infor||Champion Petfoods||Food Production||1000||500||Legacy System||Infor Food & Beverage suite, Infor M3, Infor ION||4Q15|
|Infor||Egbert Taylor Group||Renewables & Environment||154||50||Legacy System||Infor CloudSuite Industrial (SyteLine)||1Q16|
|Infor||Ferrari||Automotive||3500||3270||Baan ERP||Infor LN, Infor ION, Infor Warehouse Mobility, Infor Sales & Operations Planning||1Q16|
|Infor||Gentex Corporation||Automotive||4757||1580||SAP B1||Infor XA||4Q14|
|Infor||LEWCO, Inc||Machinery||150||50||Made2Manage||Infor SyteLine||3Q15|
|Infor||Meira Oy||Consumer Goods||180||85||Legacy System||Infor M3, Infor Demand Planner||4Q15|
|Infor||Moog Inc||Aviation & Aerospace||11000||2600||Baan ERP||Infor LN||3Q14|
|Infor||Preem||Oil & Energy||1200||2000||Legacy System||Infor M3||1Q16|
|Infor||Rosenbauer International AG||Automotive||3100||870||Legacy System||Infor ERP, Infor BI||2Q16|
|Infor||Scott Bader||Chemicals||650||255||Movex ERP||Infor M3||1Q16|
|Infor||Valmet||Machinery||12300||3300||Baan ERP||Infor LN, Infor ION, Infor Ming.le, Infor d/EPM, Infor Warehouse Mobility, Infor Field Service||2Q16|
|Intuit Inc.||TaxAssist Accountants||Accounting||650||100||Legacy System||Intuit QuickBooks Online||1Q16|
|McKesson||Affiliated Radiologists S.C.||Hospital & Health Care||50||5||Legacy System||McKesson Business Performance||2Q16|
|McKesson||Dominion Pathology Associates, PC||Hospital & Health Care||10||1||Legacy System||McKesson Business Performance||2Q16|
|Microsoft||AB Agri||Retail and Consumer Goods||3000||1900||Legacy System||Microsoft Dynamics AX||1Q15|
|Microsoft||Concern Worldwide||Nonprofit Organization Management||3000||145||Legacy System||Microsoft Dynamics GP||1Q16|
|Microsoft||Connect Hearing SA||Health, Wellness and Fitness||250||50||Legacy System||Microsoft Dynamics NAV||1Q16|
|Microsoft||Datek Solutions||Computer Hardware||30||17||Sage Line 50||Microsoft Dynamics NAV||2Q16|
|Microsoft||Firstkind||Medical Devices||50||5||Legacy System||Microsoft Dynamics NAV||1Q14|
|Microsoft||Georgia Swarm Lacrosse||Sports||50||10||In-House Legacy System||Microsoft Dynamics GP||3Q15|
|Microsoft||ice.net||Telecom.||150||20||Legacy System||Microsoft Dynamics NAV||1Q16|
|Microsoft||JTS (Just Trading Scotland)||International Trade and Development||50||5||Legacy System||Microsoft Dynamics NAV||1Q16|
|Microsoft||Just Eat||Online food ordering||1500||247||Legacy System||Microsoft Dynamics AX||4Q15|
|Microsoft||Mastermate||Wholesale||300||70||Legacy System||Microsoft Dynamics NAV||2Q15|
|Microsoft||Mindz||Information Technology and Services||40||10||Legacy System||Microsoft Dynamics GP||2Q16|
|Microsoft||Trago Mills||Retail||150||20||Legacy System||Microsoft Dynamics NAV||2Q16|
|Microsoft||Universal Pegasus International||Oil & Energy||1500||1750||JD Edwards||Microsoft Dynamics AX||1Q16|
|Microsoft||Weetabix Limited||Retail and Consumer Goods||1800||457||Microsoft Dynamics AX 2009||Microsoft Dynamics AX 2012 R-3||3Q14|
|NetSuite||Cosmosupplylab||Consumer Electronics||10000||2100||Epicor ERP||NetSuite OneWorld||2Q16|
|NetSuite||Lindemann Chimney||Wholesale||130||15||Legacy System||NetSuite OneWorld||2Q16|
|Oracle||Adventist Health||Hospital & Health Care||23400||3601||PeopleSoft Financial Management, PeopleSoft Supply Chain Management, Oracle Fusion Financial Analytics, Oracle Fusion Procurement and Spend Analytics||Oracle ERP Cloud||3Q16|
|Oracle||AthenaHealth||Software||4668||924||Microsoft Dynamics GP, NetSuite||Oracle ERP Cloud||1Q16|
|Oracle||Blue Shield of California||Healthcare||6800||13400||Legacy System||Oracle ERP Cloud||2Q16|
|Oracle||Chicago Sun-Times||Daily newspaper||350||372||Sage Line 50||Oracle ERP Cloud||1Q16|
|Oracle||DHL||Express Logistics||424351||56630||Legacy System||Oracle ERP Cloud||2Q16|
|Oracle||Federal Deposit Insurance Corporation||Government corporation||8713||39100||Legacy System||Oracle ERP Cloud||2Q16|
|Oracle||Fox Home Entertainment||Home video||12100||13280||JD Edwards||Oracle ERP Cloud||1Q16|
|Oracle||Kentucky State University||Education||1600||53||Ellucian Banner||Oracle ERP Cloud||2Q16|
|Oracle||Lending Club Corporation||Personal Finance, Software||1382||501||Oracle E-Business Suite||Oracle ERP Cloud||1Q16|
|Oracle||Lenovo||Computer hardware Electronics||60000||44910||Legacy System||Oracle ERP Cloud||1Q16|
|Oracle||LG Electronics||Consumer electronics||82000||48280||Legacy System||Oracle ERP Cloud||1Q16|
|Oracle||McKesson||Healthcare||70400||190884||JD Edwards||Oracle ERP Cloud||2Q16|
|Oracle||Mitsubishi Electric||Electrical equipment Electronics||120958||39510||JD Edwards||Oracle ERP Cloud||2Q16|
|Oracle||Rutgers University||Education||9000||1002||Oracle E-Business Suite||Oracle ERP Cloud||1Q16|
|Oracle||Toshiba||Consumer Electronics||198741||9400||Oracle E-Business Suite||Oracle ERP Cloud||2Q16|
|Oracle||U.S. Department of Energy||Government Administration||13341||30600||Oracle E-Business Suite||Oracle ERP Cloud||1Q16|
|Sage||Apollo Oil||Oil & Energy||150||30||Legacy System||Sage X3||4Q15|
|Sage||CableCom Networking||Internet||100||10||Sage 50||Sage X3||2Q16|
|SAP||Anevia Group||Telecom.||200||30||Legacy System||SAP Business ByDesign||4Q15|
|SAP||Camelot Management Consultants||Professional Services||320||55||SAP ERP||SAP Business ByDesign||1Q16|
|SAP||Devialet||Consumer Electronics||75||35||SAP ERP||SAP Business ByDesign||1Q16|
|SAP||ESI ITI (SimulationX)||Computer Software||120||50||Legacy System||SAP Business ByDesign||4Q15|
|SAP||Giovenco Industries & Stork Technical Services Australia||Mechanical or Industrial Engineering||19000||2300||Infor LN||SAP Business ByDesign||3Q16|
|SAP||Heliotron Deutschland GmbH||Consumer Goods, Manufacturing||52||10||Legacy System||SAP Business ByDesign||1Q15|
|SAP||iMerchandise||Apparel & Fashion||250||50||Legacy System||SAP Business One||1Q16|
|SAP||Lloyds Register||Maritime and shipping Energy||9000||1030||JD Edwards||SAP Business ByDesign||4Q15|
|SAP||Orolia SA||Telecom., Professional Services, Software||400||80||Legacy System||SAP Business ByDesign||4Q15|
|SAP||StepStone||Internet||900||262||SAP ERP||SAP Business ByDesign||1Q16|
|SAP||TELES AG Informationstechnologien||Manufacturing, Professional Services||56||100||Infor BaaN||SAP Business ByDesign||4Q15|
|Unit4||AGS Airports Limited||Airlines and Aviation||1000||250||Oracle eBusiness Suite||Unit4 Business World||2Q16|
|Unit4||Dutch Organization for Scientific Research (NWO)||Research||1500||500||Legacy System||Unit4 Business World||1Q16|
|Unit4||Kingston University||Education||2040||700||Legacy System||Unit4 Business World||2Q16|
|Unit4||Louisburg College||Education Management||160||15||Unit 4 Three Rivers Systems||Unit4 Student Management||1Q16|
|Unit4||National Trust for Historic Preservation||Museums and Institutions||350||61||Oracle eBusiness Suite||Unit4 Business World On!||2Q16|
|Unit4||Reykjavik University||Education||500||100||Legacy System||Unit4 Student Management, Unit4 Business World||2Q16|
|Unit4||Royal College of Music (RCM)||Education||380||50||Midland HR and Payroll||Unit4 Student Management||2Q16|
|Unit4||Swiss Education Group (SEG)||Hospitality||706||100||Legacy System||Unit4 Student Management||2Q16|
|Unit4||University of Waterloo||Education||3500||1000||Legacy System||Unit4 Business World||1Q16|
|Workday||Caliber Collision||Automotive||2800||1200||Legacy System||Workday Financial Management||2Q16|
|Workday||Care.com||Internet||600||146||Legacy System||Workday Financial Management||2Q16|
|Workday||Commerce Bank||Banking||4770||227||Legacy System||Workday Financial Management||2Q16|
|Workday||Premier Healthcare Services||Hospital & Health Care||400||60||Legacy System||Workday Financial Management||2Q16|
|Workday||The Ohio State University||Higher Education||30000||4000||Legacy System||Workday Financial Management||1Q16|
Will rising tide lift all boats? Despite the fact that the ERP applications market could add $8 billion in incremental revenues over the next five years, not all gains will be shared equally. In 2012 a number of vendors including Athenahealth, Infinite Campus and RealPage have made a concerted effort to gain share through competitive wins, namely displacing the incumbents such as QSII, Skyward and Yardi, respectively. The outcome could only be described as acrimonious at best.
For example, Infinite Campus of Blaine, MN, won a state-wide contract worth $15 million to install student information system in Wisconsin, the home state of its rival Skyward, which for years has been the ERP provider for 50 percent of Wisconsin school districts. Skyward appealed the decision all the way to Wisconsin Governor Scott Walker threatening to leave the state if the contract was upheld. The same scenarios are expected to play out on a wider scale as Cloud-based ERP vendors direct their resources squarely against their on-premise counterparts in a frenetic race to win the bulk of ERP implementations mostly through legacy system replacements across the entire marketplace.
The storm may have passed, but the damage has already been done. For ERP applications vendors, the shift toward Cloud delivery and mobile extensions will leave some more exposed than others. As customers begin to reevaluate their back-office environments in order to achieve better results, the new era of corporate computing, which favors easy-to-use Web services and always-on availability over heavy customization or batch processing, could rearrange the competitive landscape.
Amid the volatility, the only certainty is that the current crop of leading ERP applications vendors will be hard pressed holding onto their existing customers, let alone winning new ones, in another potentially devastating storm, one that could bring calamity for some and opportunity for others.
Definition of Enterprise Resource Planning(ERP) Applications
Integrated applications suites designed to automate a range of business processes from back-office operations to financial management and from sales order capture to customer information management within a vertical or across 21 industries(see below for full list of industry definitions).
Schematic View of ERP Applications Market, Features for Functional Areas Within an Enterprise or Industry, and How The Market Derives Revenues From These Functional Areas.
ERP Applications For 21 Industries Including Software Revenues Derived From Integrated Functional Areas For The Vertical As Part Of The Worldwide ERP Applications Market
1 – Aerospace & Defense(Aircraft and parts, defense contractors) – Aviation Maintenance Management, Air Traffic Management applications, Flight operations software, Quality management system, Financials, HR, Procurement
2 – Automotive(Automotive production, equipment, repair, services) – PLM, CAD, CAM, Dealer Management System, Parts Management, Financials, HR, Procurement
3 – Banking and Financial Services(Credit, lending, securities institutions) – Hedge fund administration, Core Banking, Cash, treasury, payment, risk management and supply chain finance solutions, Investment management system, Securities transaction and online trading technology, Mortgage, Loan origination and processing solutions, Teller transaction and loan processing, automated loan decisioning, analytical science analysis, workflow management, and sales and service solutions, Financials, HR, Procurement
4 – Communications(Telecom services providing point-to-point contact) – Converged billing, Multi-party settlement, OSS, BSS, Financials, HR, Procurement
5 – Construction and Real Estate(Contracting and building of commercial, public, and residential structures, real estate management) – Bidding, cost estimates, Time Tracking, Homebuilder Software, Quantity Takeoff Software, Property Management, Financials, HR, Procurement
6 – Consumer & Packaged Goods(Consumer goods including non-durables, apparel, food and beverage and packaged goods) – Product lifecycle management, Supply Chain Management. eCommerce, Pricing Optimization, Financials, HR, Procurement
7 – Distribution(Wholesale and distribution of goods to other enterprises) – Supply Chain Management, Transportation Management, Financials, HR, Procurement
8 – Education(K-12 schools, colleges and universities, technical and vocational, distance learning) – Student Information System, Learning Management, Fund Accounting System, Higher Education Administration, Financials, HR, Procurement
9 – Energy, Mining & Natural Resources(New and existing energy exploration and production, forestry, mining) – Risk Management, Commodity Trading, Physical Logistics, Regulatory Compliance, Reservoir Management, Carbon, Energy, Enterprise Water Accounting; Sustainability Metrics and CSR Management, Enterprise carbon management software, Natural Resource Optimization Modeling, Financials, HR, Procurement
10 – Government(Federal, state and local government agencies, nonprofit) – Public Safety Software, Grants and performance management, Computer Assisted Dispatch, Jail Management, Courts Management, Tax Collections, Records Management, Financials, HR, Procurement
11 – Healthcare(Healthcare providers, hospitals, physicians, clinics, hospices) – Electronic Health Record, Practice Management, Revenue cycle management, Financials, HR, Procurement
12 – Insurance(Entities that offer noncompulsory insurance of any kind) – Agency management system, Policy administration solutions, Pensions administration software, Billing and Claims software, Underwriting, Property & Casualty Management, Insurance Broker and Financial Planning Software, Financials, HR, Procurement
13 – Leisure and Lodging(Gaming, amusement, recreation services, hotels, cruises, lodging facilities) – Property Management, Cash Journaling & Gratuity Automation, Revenue Optimization, Hotel distribution, CRS, Channel management, Inventory Management, Financials, HR, Procurement
14 – Life Sciences(Pharmaceuticals, medical devices and life technologies) – Clinical trial management, Enterprise Risk, Compliance and Quality Management, Incentive compensation, sales performance management, Financials, HR, Procurement
15 – Manufacturing(Discrete, high-tech, process manufacturing) – Production Planning, Maintenance Management, Quality Management, CAD/CAM software, Manufacturing ERP, Manufacturing Execution System, Product lifecycle management, Financials, HR, Procurement
16 – Media & Entertainment(Content distribution, broadcasting, publishing, motion pictures) – Distribution resource management for publishing, content distribution; warehouse management system, supply chain management for publishing and content distribution, Media asset management (MAM); digital media infrastructure; digital asset management (DAM); Dynamic ticket pricing for live events, Broadcast resource management; equipment asset management; broadcast engineering and operations (E&O), FInancials, HR, Procurement
17 – Oil and Gas, Chemicals(Fuel extraction, petroleum refining, primary derivatives from oil, chemicals and allied products) – Oil and Gas Operations Management, Reserves Management, Capital Planning, and Budgeting, Well Production Software, FInancials, HR, Procurement
18 – Professional services(Business, engineering, IT, legal services) – Timesheet and billing, Legal Practice Management, Project Management, Project Portfolio Management, Field Service Management Software, Professional Services Automation, FInancials, HR, Procurement
19 – Retail(Enterprises involved in the sale of goods, services, general and convenience stores, restaurants) – Multi-channel retail software, Point of Sale system, Store management system, Trade Promotions Management, Fresh food software, Price Optimizaton, Health and Safety Software, Workplace Risk Management solutions, Retail Execution Management solutions, Financials, HR, Procurement
20 – Transportation(Operation of means of moving freight and passengers) – Cargo Management, Airport Managment System, Scheduling, Intelligent Transportation, Fare Collection, Ferry reservation systems, Fleet management, Financials, HR, Procurement
21 – Utilities(Electricity, water and gas utilities) – Customer care, billing, Smart meter infrastructure, Energy Trading Risk Management, SCADA, Financials, HR, Procurement