The enterprise applications market continues to experience a shake up where the number of independent software vendors (ISV) is decreasing, and one, true global mid-market incumbent vendor Epicor Software Corporation (NASDAQ: EPIC), has been benefiting. Epicor, which conducts business in over 140 countries and 32 languages, has had a healthy financial performance (see Figure 1 & 2) aided through acquisitions which began with Clarus at the end of 2002. It was followed by ROI Systems and TDC Solutions mid-2003, and Scala in 2004 (for more information, see Epicor Picks Clarus' Bargain At The Software Flea Market and Epicor Conducts Its Own ROI Acquisition Rationale and Epicor's Mid-Market Pitch Becomes Higher For (One) Scala).
At the end of August, the vendor announced its revised unified portal strategy that is envisioned to provide rich portal content to all its customers through a more secure and standardized portal platform. In developing Epicor Portal 8.2 (which is scheduled for general availability in late 2005), Epicor is leveraging its platform strategy of Microsoft .NET across all product families—Epicor Enterprise, Epicor Manufacturing, and Epicor iScala. In addition, Epicor Portal will reportedly deliver data exploration and collaboration using Microsoft Windows SharePoint Services (which technology provides basic on-line collaboration and content management capability) and Microsoft Office SharePoint Portal Server 2003 (which uses a directory to aggregate multiple SharePoint Web sites and then allows documents and other content to pass between them). Currently, Epicor's portal products do not include on-line discussion or document management features, whereas the upcoming SharePoint-based Epicor Portal will include those features—as well as a search capability—consistently across all Epicor's product lines.
The bottom line of Epicor's portal strategy is to leverage the leading portal infrastructure, Microsoft SharePoint Products and Technologies, and to provide a more secure and collaborative portal environment. Thus, Epicor Portal will reportedly handle user roles, access, security, and personalization by leveraging the SharePoint portal framework. In turn, Epicor will provide rich, industry-specific content like workflows, performance indicators, and reports via server-based .NET control programs called SharePoint Web Parts with role-based security and straightforward end user authoring. With its expertise in creating targeted industry-specific content, combined with the extensible portal framework provided by SharePoint Portal Server 2003, Epicor will strive to provide a feature-rich resource of information that is distributed from a central, secure point of access.
This is Part One of a two-part note.
Part Two will analyze the market impact, discuss challenges, and make user recommendations.
Epicor Portal Strategy
Epicor Portal's value proposition lies within empowering users and ending the usual unproductive game of relying on the information technology (IT) department to anticipate, interpret, and provide valuable business insight within an on-line portal infrastructure. Rather, the solution is designed to put these controls in the hands of the people who find value in the information they seek. To that end, the end users will have data visualization facilities, without requiring knowledge of the database or querying language, which should enable swift information exchange for employees, trading partners, and consumers. That is to say that by using SharePoint Products And Technologies, Epicor Portal will incorporate collaborative tools for multiple audiences. Collaborative user workspaces that combine documents, business data queries, announcements, tasks, and more will then be used by project teams, work groups, departments or should act as a communications tool for the entire organization. Collaboration should also extend to customers, partners, and the suppliers to increase communication, further supply chain visibility and foster greater business transparency.
With the release of Epicor Portal, each of the Epicor product families will eventually leverage a single, consistent portal strategy and platform—Microsoft SharePoint Products and Technologies—with the idea to have one portal product with one implementation process regardless of industry or region. The convergence of Epicor's product families through the new portal strategy is in line with the company's commitment to continue to support and enhance its existing products. At the same time, Epicor will leverage opportunities to provide standard infrastructures and features where possible.
Basically, the new Microsoft SharePoint-based portal will replace a collection of different portal products the vendor had previously developed for its enterprise resource planning (ERP) product lines. For instance, Epicor currently sells several Web-based access products for its Vantage manufacturing ERP product, such as Customer Connect, Sales Connect, and Buyer Connect. Additionally, the vendor sells a separate but similar product called Enterprise Information Portal (EIP), for the Epicor Enterprise ERP suite. However, a true portal add-on is not currently available for the Epicor iScala product line, where the opportunity seems to be the most apparent.
Epicor also hopes that basing its portal products on the widely-used and trendy SharePoint technologies will increase the number of ERP customers using Epicor's portal offerings. SharePoint has become a near portal commodity with estimated over 40 million users. Its growth has been so large, that some of competitors have, with a heavy heart, resigned themselves to the fact that SharePoint has "sprung up like weeds" across IT departments. As a result, Epicor should eliminate unnecessary and costly multiple portal infrastructure requirements, because the technology fits the needs of the mid-market, offering reasonably rapid deployment, ease of use, and lower cost of entry and total cost of ownership (TCO).
To that end, Epicor hopes to provide the best possible out-of-the-box experience for the user. Both Microsoft SharePoint and Epicor Portal can be installed in under an hour to provide a functional Web site with search, topics, news, document management, and other pertinent capabilities. Also, users will reportedly be able to immediately add Epicor Web Parts without administrative or development resources, and the availability of automatic integration with Microsoft Office 2003 goes without saying.
The move by Epicor to embrace the SharePoint portal technology is also consistent with the company's strategy of becoming more aligned with Microsoft. With respect to technology, mid-sized companies are practical consumers, typically selecting affordable, proven solutions, especially in light of the recent and ongoing dramatic decrease in IT costs. This ,coupled with a simultaneous increase in computing power, has made several key new technologies accessible to this cost-conscious market. Microsoft has, to that end, leveraged these increased computing capabilities to develop Microsoft BackOffice (now the Microsoft Windows Server family), a network operating system (OS) and scaleable relational database management system (RDBMS) that provides smaller businesses with a technology infrastructure previously accessible only to Global 1000 corporations.
Epicor Technology Strategy
The development of cost-effective infrastructures has reportedly increased medium companies' investments in enterprise applications, and Epicor's product offerings, product development efforts, and services are focused on meeting the enterprise business application needs of these growing mid-sized businesses. As a group, mid-sized companies face tremendous global competitive pressures as they compete for business against larger corporations, other mid-sized competitors, and smaller start-ups.
They have to remain close to their customers and suppliers, and to make the most effective use of relatively limited resources. Yet, these prospective user companies demand a quick return on technology investments and require that solutions be affordable not only to acquire and implement, but also to maintain and support throughout the solution's entire operational life span. To that end, with more than 40 million instances of SharePoint Portal Server have been sold since its release, SharePoint Products and Technologies have been offering rapid deployment. It has also been implemented with limited or no support, and presents a competitive price point—which are all critical features for mid-market companies. For more information, see What Do Users Want and Need?.
Consequently, Epicor's technology strategy has been, for some time, to develop enterprise software applications using industry-standard tools where possible, and to take advantage of leading third-party, industry-standard technologies for database management systems, operating systems, user interfaces (UI), infrastructure, and connectivity (including Internet, intranet, and extranet access). For businesses to compete in today's increasingly real time world, they need to adopt an infrastructure that can integrate the Internet, wireless, mobile, voice response, and personal digital assistants (PDA) to support "anytime, anywhere" business. Computing architectures like Microsoft .NET have allowed Epicor enterprise solutions to continue to transition to service oriented architectures (SOAs), and support commerce in a distributed computing world.
The vendor has increasingly been using Web services, which support the integration of computing and communication paradigms as one across multiple devices. It also enables its solutions to be integrated with other applications more easily and supports the increased need for collaboration in today's Internet-based world. Web services are software components that allow the creation of applications that can be programmed and published over the Web. Since Web services are portable and interoperable and because they are not vendor specific, they are rapidly becoming a standard for integrating disparate systems and applications (see Understanding SOA, Web Services, BPM, BPEL, and More).
Epicor has standardized its Web services development on the Microsoft .NET Framework, and the Epicor Clientele CRM.NET, Epicor for Service Enterprises, iScala, Vantage, and Vista product suites have been architected for Web services to more easily integrate and securely share information throughout the enterprise and with trading partners. As a matter of fact, Epicor has embraced .NET even more zealously than its creator Microsoft, often leaving Microsoft staffers in their development labs astonished (if not envious). As a good example, over two years ago, the vendor released Clientele CRM .NET as a pure .NET-based product (see Epicor Claims The Forefront Of CRM.NET-ification).
Hence, at the company level, Epicor's standardized technology direction currently embraces the Microsoft .NET Platform for extensible markup language-based (XML) Web services. Through .NET, which is the next generation of Microsoft's Distributed interNet Applications Architecture (DNA) and Component Object Model (COM), the vendor hopes to be able to provide comprehensive support for Web services deployment and enterprise application integration (EAI). This technology strategy has enabled Epicor's still diverse development teams to leverage Microsoft technology, while allowing each product group to continue to use the individual databases and development tools appropriate to the requirements of each product's target market.
The vendor has also incorporated numerous features into its UIs to simplify the operation of and access to its products. All of the product lines incorporate the popular Microsoft Windows graphical user interface (GUI) metaphor that includes the tools like industry-standard field controls, pull-down menus, tool bars, and tab menus that facilitate the use of the software. The products also incorporate the latest and modern GUI features such as process wizards, cue cards, advanced on-line help and on-line documentation. The UIs are based upon today's single document interface (SDI) standards, while, as the model for distributed computing continues to evolve through the advent of Internet technologies, Epicor offers additional client deployment models, including thin-client, smart-client, browser-based, and mobile client access.
Epicor Portal should bring further guided discovery and business insight to end users who will be able to add filters and prompts to focus on information important to them. They will be able to arrange and title the information for their understanding. Moreover, they should be able to simply pick what data they want to view, without having to know where or how the data is formed. Additionally creating personal views of business or a key performance indicators (KPI) are touted as a simple step-by-step wizard-driven process.
This concludes Part One of a two-part note.
Part Two will analyze the market impact, discuss challenges, and make user recommendations.