With 2011 just about under wraps, we asked our analysts to weigh in on this year’s trends and enterprise software news-makers.
Jorge García, BI Research Analyst
Three business intelligence (BI) terms kept making the headlines in 2011:
1. Big data: Everyone is jumping on the big data wagon—Oracle and Microsoft with their Hadoop appliances; Teradata’s acquisition of Aster Data; HP’s purchase of Vertica, IBM’s acquisition of Netezza; and the release of EMC’s Data Computing Appliance (as a result of its acquisition of Greenplum). This year the vendors honed their weapons; in 2012 we may be witnessing the Big Data War. And of course, there was plenty of big talk about NoSQL databases and the emergence of companies like Cloudera and DataStax offering management applications for Hadoop and Cassandra respectively.
2. Mobility: The iPad turned out to be the quasi-standard for mobile BI offerings, as most vendors released or are developing mobile offerings specifically for this type of tablet. It will be interesting to see how the BI industry adapts to adoption of HTML5 to replace (or not) client app-based solutions for BI.
3. In-memory: While QlikView has long awaited true competition, this year in-memory technologies gained momentum, especially with SAP’s release of HANA. In 2012 we can expect more of this with SQL Server 2012 and its new in-memory features, new offerings such as VoltDB, and of course Oracle’s TimesTen positioning, which will all make for an interesting battle in 2012.
Another point worth mentioning is the maturity of BI solutions for the small to medium business (SMB) space. Offerings like Tableau and LogiXML, as well as offerings targeted specifically at SMBs by IBM (Cognos Express) and SAP (Edge BI), are gaining entrance in the SMB market, and providing affordable BI services to an industry that needs improved decision-making processes.
Gabriel Gheorghiu, CRM/ERP Research Analyst
2011 was a year with no major surprises, the only exception being the fact that in December 2011 Autodesk decided to launch its own product lifecycle management (PLM) product (a rare occurrence in the PLM world).
A new trend is taking place in the enterprise resource planning (ERP) landscape: cloud vendors are offering financials and back-office (human resources [HR] or project management) functionality, which means that vendors like Workday and Zuora, or the recent Intacct-Clarizen alliance, are now providing strong competition with non-manufacturing ERP cloud products such as Netsuite or SAP Business ByDesign.
More and more ERP vendors are offering hosted versions of their solutions (the most recent being Exact Macola and Sage MAS 200 Online), with the option to move on premise as the user company grows, as these vendors don’t offer cloud solutions for larger companies.
For customer relationship management (CRM), the consolidation in the social and cloud space was more evident in 2011, as demonstrated by acquisitions such as Radian6 by salesforce.com and RightNow by Oracle. A trend that seems to be more pronounced in CRM is the extended functionality vendors now offer for features that have not traditionally been associated with CRM. Some examples are business and project management (Pega, Sword Cibodle), and product development (Accept 360 and PTC Windchill)—TEC’s recently published CRM Buyer’s Guide describes this type of innovation in more detail.
Aleksey Osintsev, ERP Research Analyst
There were four notable trends that came to this forefront this year:
1. Software as a service (SaaS): User interest in SaaS rose steadily throughout 2011, and ERP vendors must rise to meet this challenge. Most vendors provide either a SaaS deployment option (primarily single-tenant) or at the very least a hosted version of the software. I expect this trend to prevail next year as well, although there are some ambiguous and unresolved issues regarding cloud-based deployments, especially among manufacturers. I’ll publish research findings about these concepts at the beginning of 2012.
2. ERP vendors have finally started listening to their client’s pleadings to make ERP software applications less rigid and more agile, and capable of reflecting ongoing changes in business processes. And although some vendors are taking concrete steps in this direction, in many other cases flexibility is being understood simply as the ability to customize the user interface. For other vendors, software flexibility manifests only at the level of marketing hype. There are only a few ERP players in the market that consider changeability as a serious competitive advantage, and that have designed agility into the product architecture.
3. More and more ERP vendors are providing access to their software from an increasing number of mobile devices. I can’t say this is a new trend, as the market has been headed in this direction for several years already, but in 2011, I saw more ERP applications allowing users to access the core system via mobile devices. Many vendors, however, still offer only BI or reporting data aimed at top management. I expect this tendency to grow in 2012, as mobile devices are likely to dominate quite soon.
4. The confluence of lean initiatives and ERP is my favorite topic, and I can’t leave it off my list of 2011 trends. In 2011, I saw more ERP software applications declaring an embedded lean philosophy, which is a good thing in itself. It means that more and more manufacturers, service providers, and enterprise software vendors are beginning to realize that the lean concept does truly add value, and that it is time to incorporate lean ideas and tools into ERP software. All too often, unfortunately, the interest in lean stops there. As with my point above re: software flexibility, only a few ERP companies are now providing a truly lean environment that includes common kanban cards, pull-based business processes, lean accounting capabilities, and embedded notions of constant improvement. It will be interesting to see how widely these initiatives are accepted by traditional ERP system providers in 2012.
Sherry Fox, HCM Research Analyst
In the world of human capital management (HCM), 2011 was the year of mergers and acquisitions (M&As), partnerships, and rebrands! The reason for this was that the timing was right for big players to get in the game and snap up some of the smaller niche solutions on the market, while ensuring that their brands made strong impacts.
Many of these larger software vendors believe that most HR professionals want to have an integrated approach from a single vendor rather than point solutions from a variety of different vendors. More often than not—as we’ve seen with recent M&A activity—these larger vendors are often purchasing solutions that provide the missing pieces of the functionality puzzle to round out their own offerings.
M&As and partnerships are typically planned and executed based on perceived cost savings or market synergies, and are often seen as a means to maintain and strengthen the acquiring company’s position in the marketplace, as well as being a relatively quick way for the company to expand into new markets while incorporating new technologies. Yet the success of such deals is by no means guaranteed.
We’ll have to wait until a little further into 2012 to see how the following M&As, partnerships, and rebrands pan out:
- StepStone Solutions acquired MrTed, then later rebranded to become Lumesse.
- ADP acquired Workscape.
- Authoria merged with Peopleclick, then later rebranded as PeopleFluent.
- Kenexa elevated its compensation abilities with Salary.com.
- Taleo acquired Learn.com.
- Workstream acquired Incentives Advisors, LLC.
- Blackboard partnered with SuccessFactors.
- SumTotal acquired Softscape and GeoLearning.
- Lawson acquired Enwisen.
- Technomedia acquired Hodes iQ (and partnered with Bernard Hodes).
Once of the biggest shocks of 2011 came with SAP’s acquisition of SuccessFactors. I did not see that one coming! However, this acquisition makes perfect sense because of the added technology and expertise that positions SAP as a serious HCM contender for 2012.
Philippe Reney, SCM Research Analyst
2011 was the year when supply chains bent sharply and broke.
"Lean" has been on the lips of chief executive officers (CEOs) since the 2008–2009 recession, and 2011 marked even stronger consolidation and integration of supply chains so as to handle fluctuating demand. Despite a slow and mitigated economic recovery, businesses in 2011 were far more attuned to demand management than ever before. However, this may have been a case of "too much of a good thing." With so much focus on the downstream, many businesses neglected to address the fact that their upstream, while efficient, was also extremely fragile.
2011 was peppered with the types of natural disasters that wreak havoc on supply chains, including floods in Australia and Thailand, and Japan's earthquakes and tsunami. Adding to the uncertainty was the unrest in various spots all over the world. Companies with dispersed supply chains have suffered setbacks that will take months, if not a full year, to alleviate.
While they have been working hard to put alternatives in place, they can hardly expect to generate the same returns with "last-minute" partners that are simply not as integrated as their predecessors. At best, they can only hope to mitigate the impact on their margins. While this is happening, more adroit competition will be favourably placed to take advantage of the situation.
This ought to trigger a shift in the way some businesses approach their supply chain structure. The ability to rapidly integrate new partners as a way of creating a flexible framework will be a saving grace for businesses facing unpredictable events.
P.J. Jakovljevic, TEC Principal Analyst
2011 was the year of social, cloud, mobility, and system malleability (hence the success of Unit4, SuccessFactors, and newcomer Workday).
As for the biggest surprises of 2011: the Japan earthquake and Taiwan floods are just a couple of the natural disasters that have exposed global supply chain risks and the need to act swiftly (see my series on merging planning with execution).
The vendors that chewed up the largest amount of competitive turf this year via acquisition: Oracle (RightNow, InQuira, and Endeca, to name only some), IBM (DemandTec, Tririga, Emptoris, etc.), HP (Autonomy), SAP (SuccessFactors and Right Hemisphere, as well as numerous others).
Vendor acquisitions that should have happened but didn’t: Siemens PLM/PTC/Dassault Systemes didn’t acquire Autodesk, JDA didn’t acquire Manhattan Associates, IBM didn’t acquire Ariba, and SAP and HP didn’t merge.
One development that might be the most important of the year, is news from the recent SAP Influencers Summit and SAP TechEd events that SAP is readying HANA as a "general purpose database" that will make traditional relational database management systems (RDBMSs) (especially Oracle, since SAP hates paying royalties to its arch-nemesis) obsolete (in the very long term). I and my colleague Jorge García will be providing some further analysis on that score in the coming weeks.
The most underplayed story of the year was the news that cloud businesses are not that profitable, with Taleo, Saba, and salesforce.com being some notable exceptions. Other underplayed items: an interesting change of vision and leadership at Infor, and its closer relationship with salesforce.com (with the latter's recent minority investment in Infor).
Also, reports on Microsoft's demise (or total irrelevance in the market) were slightly exaggerated—it will be interesting to see Kinect's use cases in industrial environments, beyond the sphere of video games…
The Vendor Shootout events have demonstrated healthy ERP replacement activity in the market, as well as users' openness to cloud ERP.
Companies (users of ERP, SCM, business performance management [BPM], etc.) are still placing primary emphasis on machines (assets), materials, and methods (processes), and not enough on optimizing manpower (labor, human capital), which should change going forward with Kronos, Reflexis, RedPrairie, and ScheduleSoft’s efforts.