Despite their dominant market share in ERP systems, the top three software providers are facing new competion that may erode their strong positions.
According to a benchmarking study by ERP specialists Panorama Consulting, the three companies together have a 47 pc share of the global market.
“But the market is shifting,” Panorama warned in the study. “Enterprise solutions are being commoditized, cloud and SaaS ERP vendors are gaining traction, and companies are looking for more than a marquee name on their ERP software.”
The consultants found that companies are worried about long implementation times, lengthy payback periods and difficulties in seeing actual benefits from the systems.
“If the market begins to perceive that this (or any) software simply isn’t bringing the returns necessary to justify its price, a significant drop in market share will soon follow,” Panorama said.
For the moment, SAP continues to dominate the market for ERP implementations, followed by competitors Oracle and Microsoft.
According to the study, titled “Clash of the titans,” Germany’s SAP, the world’s largest business software maker, had a 22 pc share of the global ERP market in the 2006-2012 period. It was followed by Oracle with 15 pc and Microsoft with 10 pc.
One of the reasons for SAP’s prominence is that the company is shortlisted much more often than its competitors. The company was shortlisted by 35 pc of the companies polled, compared with 24 pc for Oracle and 17 pc for Microsoft Dynamics.
The high shortlisting rate contrasts with a finding that, once shortlisted, SAP is actually selected less frequently than its competitors.
“This suggests that those vendors likely offer products that are simply a better fit for the needs of the organizations represented in the study,” Panorama said.
The study was based on data provided between 2006 and 2012 by 2,000 ERP users in 61 countries.