Posts Tagged ‘Epicor’

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Tuesday’s Tip: Dealing With Pesky Software Licensing Audits

Published on April 19, 2011 by R "Ray" Wang

Organizations Report Increase In Software Licensing Audits

Across the board, the largest complaints about software vendors and their business practices have come from increasingly aggressive software auditing practices.  Once thought to be a small possibility, the software vendors now wield this big stick to drive up sales and of course ensure compliance.  Given the 32 percentage gain since Q1 2008 in the percentage of respondents faced with a software audits, procurement managers, CIOs, and CEOs have paid attention (see Figure 1).   Even the recent Gartner report from star analyst Jane Disbrow et al. shows that 61% of their customers have been audited by at least one software vendor.

Figure 1.  Software Vendors Ramp Up Software Audits

Software Licensing Audits Masquerade As Sales Tactics In Disguise

Is this shocking?  Should customers be concerned?    Given the relatively strong compliance rates in the high 80′s, customers should be livid that vendors are willing to jeopardize a relationship to shake down for cash (see Figure 2.).  Here are some key reasons for the audit:

  • Check for compliance
  • Identify installed base competitors
  • Drive incremental license sales
  • Prospect for up-sell/cross-sell

After speaking with 13 major software vendors, most admitted that software audit served two purposes.  The first – keep customers in compliance.  The second – shaking the bushes for new deals during the recession.

Figure 2.  Most Organizations Were In Compliance Post Software Audit

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Research Summary: Best Practices – The Case For Two-Tier ERP

Published on March 1, 2011 by R "Ray" Wang

Forward And Commentary

Legacy optimization remains a key component for funding future innovation.  Two-tier ERP emerges as one strategy to optimize existing systems while adding innovation.  The report capitalizes on the recent Software Insider survey of 235 companies looking at future strategies.

A. Introduction

Organizations continue to face an onslaught of business requirements that their existing ERP systems can no longer address.  Stuck in the past century, these ERP systems are expensive to run, difficult to upgrade, and impossible to modify for today’s fast changing requirements.  Two-tier ERP has emerged as a strategy to enable legacy optimization while reinvigorating the organization’s existing ERP systems.

B. Research Findings

Two-tier ERP refers to a business and technology strategy that enables organizations to keep existing ERP systems at the corporate level while empowering divisions or business units to innovate with a second ERP system.  Consequently, two-tier ERP deployments continue to gain favor.  Why? Organizations must optimize legacy systems while delivering on business value.  In fact, in a recent Constellation Research survey, 48% of respondents indicated that they are considering at two-tier ERP strategy (see Figure 1).  These results reflect a 27-point increase from 2009.

Figure 1.  Two-Tier ERP Growing In Popularity As A Key Strategy

While today’s two-tier strategies mostly involve on-premises solutions, cloud based solutions will gain favor over the next 18 to 24 months because of their rapid deployment capabilities, constant innovation qualities, and subscription pricing.  Organizations challenged by diverse lines of business, multiple localization requirements, or needs to phase in legacy system modernization will find a two-tier ERP strategy one that can reduce costs and provide better business value than a one-size-fits-all solution.  Whether SaaS, on-premises, or hybrid, a two-tier ERP strategy will reduce costs, meet new business requirements, and provide better business value. More…

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Research Summary: Software Insider’s Top 25 Posts For 2010

Published on January 2, 2011 by R "Ray" Wang

Themes In 2010 Reflected The Buy Side Demand For Both Optimization and Innovation

Technology buyers in 2010 focused most of their priorities on finding cost savings through legacy optimization, navigating a flurry of disruptive technologies, and designing/experimenting with new business model innovations.  Consequently, the top 25 posts for 2010 reflected these 3 major themes:

Legacy Optimization

Disruptive Technology

Business Innovation

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Quarterly Financial Tracker: Q3 CY 2010 Enterprise Software Vendors Solidify Performance Turnaround

Published on November 19, 2010 by R "Ray" Wang

The super majority (26 of 27) of publicly traded software vendors in the Software Insider Index® delivered turnaround stories for Q3 Cy 2010 year-over-year (YoY) performance.  SaaS vendors and middleware vendors led the charge with solid double digit gains against tough comps.  Performance of on-premises apps vendors reflected the easy comps from a dismal 2009 downturn.  An analysis of the 2010 CY Q2 2010 results show:

SaaS Vendors Continue To Crush All Expectations In Subscriber Growth (Figure 1.)

  • SaaS vendors showed massive gains in subscription revenue at on-premises vendor expense.  SuccessFactors (33.22%) continued the lead in quarterly revenue gains followed by a record breaking Salesforce.com quarter (29.81%).  Kenexa (25.97%) and RightNow (25.46%) also demonstrated above 25% YoY quarterly gains.
  • Subscription license growth has become the norm for both SaaS and On-Premises vendors looking at SaaS revenue.
  • On premises vendors w/ subscriptions showed traction.  SAP reported $101M of subscription revenue and JDA software reported $5.758M in subscription revenues.
  • Of note, Saba (3.89%) and Kenexa (25.97%) were added to the Software Insider Index® this quarter

Figure 1.  SaaS Vendors Continue To Crush All Expectations In Subscriber Growth (Right click to view full image)


Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Traditionally On Premises Apps Vendors Fare Well As Technology Spending Picks Up

  • JDA Software (65.29%) continues to benefit from retail and supply chain vendor consolidation.  However, JDA’s growth came from maintenance revenue, not new license gains.  In fact, the ratio of maintenance to license revenues remains dangerously high at 3.94.  The good news – focused efforts around SaaS options also grew.   Meanwhile, rival Manhattan Associates saw gains with (13.35%) YoY quarterly growth with respectable new license gains.
  • SAP (19.74%) showed a huge turnaround with significant gains.  However, new license growth came mostly from analytics revenues and not from core apps such as ERP, CRM, SCM.
  • Traditional bellwethers CA (17.21%) and Oracle (15.82%) showed above 15%, healthy YoY quarterly gains.
  • SMB vendors showed mixed results with Epicor (16.28%) leading the pack through gains in Epicor 9 and significant new license growth of 47.07%.  Epicor and Microsoft Dynamics (not listed) have been beneficiaries of the two-tier apps strategy movement.  On the other hand, IFS (5.34%), Lawson (3.35%), and Deltek (1.74%) barely moved the needle in revenues.  Deltek’s 21.38% new license growth reflected a structural shift in the business as new license gains make up maintenance losses.
  • Four vendors continue to enter dangerous trends with maintenance to license revenue ratios above 3: Manhattan (4.42), JDA (3.94) Lawson (3.86), Oracle (3.24)

Figure 2. On Premises Apps Vendors Fare Well As Technology Spending Picks Up (Right click to view full image)


Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Middleware Vendors Benefit From Optimization Mandates (Figure 3.)

  • VMware (45.84%), Informatica (30.68%), and Software AG (28.89%) crush numbers as demand for middleware, virtualization, and integration continue to gain traction.
  • All middleware vendors maintain healthy maintenance to license revenue ratios below 2.0:  SoftwareAG (.65), VMware (1.08), Informatica (1.31), Progress (1.82).

Figure 3. Middleware Vendors Benefit From Optimization Mandates


(Right click to view full image)  Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.
The Bottom Line – Enterprise Software Is Back

Refresh cycles, demanding business requirements, and shift to hybrid deployment options fuel growth for this quarter.  Organizations continue to free up budget to support legacy apps optimization to fund innovation projects.  SaaS will be the predominant entry point for new innovation while organizations seek two-tier approaches to consolidate legacy apps.  The theme for enterprise software customers remains “Show us the business value!”

Your POV.

Are you increasing your spending on enterprise software?  Want to know more about a specific vendor’s financial health? Can we help you work with a specific vendor?  Please post or send on to rwang0 at gmail dot com or r at softwareinsider dot org and we’ll keep your anonymity.  Further, let us know if you need help with your next gen apps strategy, overall apps strategy, and contract negotiations projects.  Here’s how we can help:

  • Designing a next gen apps strategy
  • Providing contract negotiations and software licensing support
  • Demystifying software licensing
  • Assessing SaaS and cloud
  • Evaluating Cloud integration strategies
  • Assisting with legacy ERP migration
  • Planning upgrades and migration
  • Performing vendor selection
  • Renegotiating maintenance

Disclaimers* Not responsible for any math errors or erroneous revenue information.

1. Calendar year estimates based on the quarter nearest the calendar year.

2. Why these vendors than others?  Easy – because I cover them.

3. Exchange rates as of February 25th, 2010 for vendors who have not published quarterly conversions.  Not responsible for currency flux.

4. Estimates created for privately held vendors, when listed.

Not sure? Please read the quarterly filings yourself =)

Related resources and links

2010 Calendar Year Q2

2010 Calendar Year Q1

Software Insider Index™ (SII): 2009 SII Top 35 Enterprise Business Apps Vendors™

2009 Calendar Year Q4

2009 Calendar Year Q3

2009 Calendar Year Q2

2009 Calendar Year Q1

Software Insider Index™ (SII): 2008Software Insider IndexTM (SII): SII Top 30 Enterprise Business Apps VendorsTM & SII Top SaaS Business Apps VendorsTM SII Top 30 Enterprise Business Apps Vendors™

2008 Calendar Year Q4

2008 Calendar Year Q3

2008 Calendar Year Q2

2008 Calendar Year Q1

Reprints

Reprints can be purchased through the Software Insider brand or Constellation Research, Inc.  To request official reprints in PDF format, please contact r@softwareinsider.org.

Disclosure

Although we work closely with many mega software vendors, we want you to trust us.  A full disclosure listing will be provided soon on the Constellation Research site.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

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Vendor Event: Epicor Perspectives 2010

Published on August 1, 2010 by R "Ray" Wang

Title: Vendor Event: Epicor Perspectives 2010

Location:
Gaylord Palms, Orlando – Kissimmee, Florida

Start Date: 2010-10-10
End Date: 2010-10-13

Description:

Speed down the road to recovery by joining us this year at Perspectives 2010 on October 10-13 in Orlando, Florida, at the Gaylord Palms Hotel and Convention Center. Explore new technologies, products, and techniques to drive performance and productivity. Listen to other Epicor customers on the value of sharing tactics and ideas with product experts and your peers. This is an opportunity to gain hands-on education, explore new strategies for solving business and economic challenges, and discuss emerging industry and business trends.

Official Event Page: Register Here

Disclosure

Although we work closely with many mega software vendors, we want you to trust us.  Epicor is a client of Insider Associates, LLC and Altimeter Group.  For the full disclosure policy please refer here.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

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Research Report: Microsoft Partners – Before Adopting Azure, Understand the 12 Benefits And Risks

Published on July 11, 2010 by R "Ray" Wang

It’s All About The Cloud At WPC10

Attendees at this year’s Microsoft Worldwide Partner Conference 2010 in Washington, D.C. already expect Windows Azure development to be a key theme throughout this annual pilgrimage.  Microsoft has made significant investments into the cloud.   Many executives from the Redmond, WA, software giant have publicly stated that 90% of its development will be focused on the Cloud by 2012.  Delivery of the Cloud begins with the Azure platform which includes three main offerings:

  1. Microsoft Windows Azure
  2. Microsoft SQL Azure (formerly SQL Services)
  3. Microsoft Windows Azure Platform: AppFabric (formerly .NET Services).

Therefore, Microsoft partners must determine their strategy based on what part of the cloud they plan to compete in and which Azure services to leverage.  As with any cloud platform, the four layers include infrastructure, orchestration, creation, and consumption (see Figure 1):

  • Infrastructure. At a minimum, Windows Azure provides the infrastructure as a service.  Data center investments and the related capital expense (capex) is replace with oeprational expenses (opex).  Most partners will take advantage of Azure at the infrastructure level or consider alternatives such as Amazon EC2 or even self provision hosting on partner servers and hardware.
  • Orchestration. Microsoft Windows Azure Platform: AppFabric delivers the key “middleware” layers.  AppFabric includes an enterprise service bus to connect across network and organizational boundaries.  AppFabric also delivers access control security for federated authorization.  Most partners will leverage these PaaS tools.  However, non-Microsoft tools could include advanced SaaS integration, complex event processing, business process management, and richer BI tools.  The Windows AppFabric July release now supports Adobe Flash and Microsoft SilverLight.
  • Creation. Most partners will build solutions via VisualStudio and Microsoft SQL Azure (formerly SQL Services).  Other creation tools could include Windows Phone7 and even Java.  Most partners expect to use the majority of tools from Microsoft and augment with third party solutions as needed.
  • Consumption. Here’s where partners will create value added solutions for sale to customers.  Partners must build applications that create market driven differentiators.  For most partners, the value added solutions in the consumption layer will provide the highest margin and return on investment (ROI).

.NET:.NET (tongue and cheek here) – Microsoft partners and developers can transfer existing skill sets and move to the cloud with ease, once Microsoft irons out the business model for partners on Azure.

Figure 1. Partners Must Determine Which Layer To Place Strategic Bets

screen-shot-2010-03-22-at-105927-pm

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Research Report: Rethink Your Next Generation Business Intelligence Strategy

Published on June 28, 2010 by R "Ray" Wang

BI Solutions Must Address The Information Management Matrix

A confluence of changing business requirements and on-going vendor consolidation leads many organizations to rethink their business intelligence (BI) strategies.  Many buyers face decisions to move beyond departmental solutions or to stay with an integrated apps based BI solution.  Meanwhile, some buyers must decide whether or not an integrated platform provides the right balance between business impact and cost of technology.  Additionally, most organizations seek support for new data types and new deployment options.  As BI continues to evolve from fragmented and historical reporting to pervasive, predictive, and real-time decision support, an organization’s success increasingly depends on the support for a expanding information matrix of (see Figure 1):

  • New and traditional data types. A proliferation of data types from social, machine to machine, and mobile sources add new data types to traditional transactional data.  Examples include content, geo-spatial, hardware data points, location based, machine data, metrics, mobile, physical data points, process, RFID’s, search, sentiment, streaming data, social, text, and web.
  • Visualization and reporting paradigms.  Users expect more than the traditional charts, gauges, and dials.  Web 2.0 innovations show how Rich Internet Applications (RIA) through tools such as AJAX, Adobe Flash and Microsoft Silverlight can create interactive BI experiences.  New and old paradigms include ad-hoc query builders, business performance management (BPM) systems, dashboards, production reports, scorecards, and advanced visualizations.  New visualization types include matrix charts, network diagrams, bubble charts, tree maps, word trees, tag clouds, phrase nets, and others.
  • Approaches and styles. Analytical techniques continue to improve as data volumes explode.  New and traditional approaches include advanced analytics, business activity monitoring (BAM), BI workspace, decision support systems, low latency BI, meta data generated BI apps, non-modeled exploration and in-memory analytics, scenario analysis, and OLAP.
  • Deployment options. With data coming from so many different sources, users are seeking new deployment options.  Common solutions in the BI portfolio include BI appliances, BI in the Cloud, BI specific DBMS, Mobile BI, open source BI, on-premises packaged BI apps, private BI clouds, and SaaS based BI.

Figure 1.  The Information Management Matrix Drives Next Gen BI


Explosion In Semi-Structured And Unstructured Data Challenges Existing Solutions

Along with new business requirements, the old world of structured data must make way for a plethora of new data types in unstructured data.  More importantly, solutions must support a growing number of industry vertical standards in semi-structured data.  Unfortunately, no single vendor can support all the data types that fit into the following three categories (see Figure 2):

  • Structured data. Structured data remains the most understood type of data.  Traditional sources comprise of data in transactional systems such as ERP, CRM, SCM and other database management systems.  Solutions conduct analysis via OLAP and traditional apps centric and database centric BI systems.
  • Semi-structured data. Common examples include flat files in record format, RSS feeds, XML documents, and data in spreadsheets.  Industry-specific XML data standards and cross-enterprise data-exchange standards such as ACORD, EDI, HL7, NACHA, and SWIFT will continue to grow as BI goes vertical.  On the document print stream front, new systems should support ASP, Met code, and PCL.
  • Unstructured data. Sources include natural-language text from e-mail, blogs, SMS, social networking sites, text fields, audio, video, and images.  Unstructured data represents up to 80% of today’s data sources.  Enterprises are challenged in discovering and organizing unstructured data for the real-time delivery of information to the right user.

Figure 2.  Data Types Fall Into Three Main Categories


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