June 16, 1998 Market Analysis SAP Rolls, While Baan and Oracle Stumble SAP (www.sap.com) is still the market leader in the business applications market arena, according to Ovum (Burlington, Mass.; www.ovum.com), an information technology analyst group. Ovum's research also indicates that Baan (www.baan.com) is stretching itself too thinly, while the Oracle Applications Group (www.oracle.com) is struggling to maintain momentum owing to problems at both the corporate and product level. According to Ovum analyst Dennis Keeling, "SAP will remain market leader in the business application arena for the foreseeable future. Its R/3 product suite may not be the most exciting client/server solution, but it is certainly the most robust, scaleable and proven one. Also, SAP's EMU offering is at least six months ahead of its nearest competitor with a very advanced, phased approach implementation." However, Keeling sees problems with SAP's slow approach to componentization. "Although appealing to the inherently conservative ERP market, this approach may leave the door open to more nimble competitors. SAP will find it hard to maintain its former growth rate and influence as alternative solutions from competitors become well known," he noted. Although Oracle successfully expanded from its database stronghold into business applications, its current efforts are not enough to keep momentum going, according to Ovum's research. "Oracle's strategy is quite different from its competitors on two levels," explained Keeling. "First it promotes a network-centric view of the world as part of its Network Computing Architecture marketing vision. Second, it promotes a partnership-based, best-of-breed approach to vertical market sectors. But the implementation of this strategy falls short of Oracle's expectations." Keeling added, "The problem lies with Oracle remaining locked in a technology-focused dual with arch rival, Microsoft. The Oracle Applications Group remains peripheral to its operations. Oracle should focus its Applications Group to take the lead in establishing a business solution approach to technology issues." Ovum's research indicates that, with the year 2000 and EMU implementation around the corner, the conservative ERP market is unlikely to experiment with the new network-centric technology as wholeheartedly as Oracle expected it to. Ovum is also concerned about Oracle still considering using an algorithm approach to EMU conversion instead of triangulation. Commenting on Baan, Keeling observed, "We think Baan has adopted a smart marketing strategy. It focuses on specific vertical markets in the manufacturing sector, targets key organizations in those vertical markets, and then rolls out its products to its supply chains. But the company's aggressive expansion strategy has spread resources too thinly. Baan increasingly works through partners, but even these are under severe pressure and the company has distanced itself from its traditional base of small businesses to focus on the more glamorous high end of the market. History shows that forgotten customer bases have a tendency of catching up with their suppliers." The Manufacturing Report © Copyright 1997, 1998 by Lionheart Publishing, Inc. All rights reserved. E-mail Editorial Dept: tmr-editorial@lionhrtpub.com Lionheart Publishing, Inc. 2555 Cumberland Parkway, Suite 299, Atlanta, GA 30339 USA Phone: 770-431-0867 | Fax: 770-432-696 E-mail: lpi@lionhrtpub.com Web Design by Premier Web Designs E-mail: lionwebmaster@preweb.com