Oracle to Enlist BPA Systems in its Mid-Market Quest

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Oracle to Enlist BPA Systems in its Mid-Market Quest
S. McVey - October 20th, 1999

Event Summary

On October 18, BPA Systems announced an arrangement with Oracle Corporation in which its flagship product, BP LINK/SC will be integrated with Oracle's latest package for mid-sized companies, FastForward(SM) Distribution (RPM) (Rapid Configuration Model). BP LINK/SC will help the Oracle application accelerate receiving, inventory and shipping transactions using bar code and data collection technology. Oracle hopes the deal will lead to increased sales of its FastForward solutions to companies with between $50 to $500 million in annual revenues.

Market Impact

BPA Systems is the latest vendor to join Oracle in its pursuit of the mid market. The $8.8 billion ERP vendor faces an immense challenge in convincing smaller companies that its monolithic application suite and architecture can be replicated on a more petite scale. Whether or not Oracle is successful in capturing a piece of the SME (Small-to-Mid Enterprise) market, these moves can have tremendous implications for other vendors in this space. Vendors who decide to partner with Oracle are often restricted to exclusive agreements, preventing them from forming similar alliances with other complementary software providers. While some advantages can be gained in the short term from this type of arrangement, dependence on Oracle can become a huge handicap for BPA if the former fails to convince prospects that FastForward is an effective mid market solution. Case in point: supply chain execution vendor, Industri-Matematik, suffered a 33% drop in license revenues in recent years when sales from its exclusive agreement with Oracle began to sag.

User Recommendations

A close look at Oracle's FastForward success stories will reveal that, by and large, the implementors have chosen to use the solution "out-of-the-box" with little or no modifications. Clearly, only those companies that have textbook business processes will profit from this type of approach. Turn-key solutions rarely include customizations in the license fee and often prohibit them altogether. Users attracted to the proposed integration between FastForward and BP LINK/SC should consult a client reference in the same industry and spend time understanding what compromises were necessary to realize a true "turn-key" implementation.

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