Will Glovia Glow Again Through Its Hub And VARs? Part 2: Challenges and User Recommendations

Will Glovia Glow Again Through Its Hub And VARs?

Part 2: Challenges and User Recommendations
P.J. Jakovljevic - September 10, 2002

Event Summary

Glovia International, an e-business applications provider and a subsidiary of Fujitsu Limited (TSE:6702) with headquarters in El Segundo, CA, has recently announced a number of companies as value-reseller (VAR) in the new Glovia Affiliate Program that was launched in February. The program's idea has been to include member companies who will augment the efforts of Glovia direct sales and professional services teams by extending its ERP solutions into high-density manufacturing markets. The affiliate program members will specifically sell to electronics, telecommunications, automotive, and industrial customers in the Mid-Atlantic, Mid-West, Pacific Northwest, South Central and South West regions.

Part One of this article detailed these announcements and recent Glovia management changes.

This Part Two of a two-part analysis of recent announcements by Glovia.

Challenges

Nevertheless, Glovia's big league aspirations are still rather optimistic at this stage. Glovia continues to suffer from low market visibility and brand recognition, which has recently been aggravated by the ownership change and subsequent restructuring. The company has not yet built a reliable and established indirect channel, and, with less than 900 customers, its client base remains significantly smaller compared to many ERP vendors.

While the Fujitsu/Glovia relationship has worked well in Japan, a difficult market for many other ERP vendors to penetrate, due to established local sales and support organization and delivery of product enhancements that support Japanese manufacturing styles (Fujitsu runs the glovia.com application suite in over 20 of its production facilities), it may prove to be quite a different case in other markets. Further, until recently, Glovia's middle and top management team had long been in a state of flux and often poached by recently higher-flying competitors in the markets it attempts to regain.

Glovia's foray into the increasingly crowded PTX market may be dubious given the market's nascence, the stiff competition and ill-fated attempts of many pure-players like Ariba, Commerce One, and partly i2 Technologies. Also, glovia.hub is still a work in progress, since its first incarnation is very much aimed at globally managed sales order processing and materials procurement, and it should reportedly go a great deal further, to become a complete integrated technology solution for implementing and operating private digital marketplaces. For now, it is about helping multi-site, multi-national manufacturers to co-ordinate their sales and procurement via portals without building out and integrating custom infrastructure and applications. This value proposition has been offered (at least in a great part) by many upper mid tier ERP players such as Intentia, IFS, QAD, and Frontstep to name some, all of them having much more fertile client bases to up-sell their components outside ERP; not to mention the competition from SAP and Oracle in the Tier 1 market, as well as the likes of Baan and J.D. Edwards.

Glovia's strategy going forward may be impeded by Fujitsu/Glovia brand confusion (associated with different markets, i.e., ERP vs. automation), as well as by seemingly disparate products amenability to different market segments (mid-market vs. Tier 1). In addition to venturing into a new territory for Glovia (outside of traditional ERP), the multiple product delivery had for some time confused/detracted customers, sales force and partners. All of them were not clear about whether and when to deploy glovia.com and/or glovia.hub. While the first product appears to be a better fit for mid-size enterprises, which often require resellers/VARs, the latter one is seemingly able to satisfy even the needs of the largest multi-national corporations, encroaching thereby at the Tier 1 territory. The technological foundation disparity of the products has also likely taken its toll by doubling the development expenses and in delivering products integration.

Namely, with its original ERP system, Glovia had also been a market follower in respect of product technology, as it has belatedly tackled delivery of support for Windows NT, Internet enablement and product componentization of its ERP system. Moreover, it had been remiss in opening the product and delivering applications programming interfaces (APIs). Contrary to it, these new B2B products (glovia.e, glovia.ec and glovia.hub) are based on Java and other contemporary Web-based open technologies. Given that Glovia has to attract customers outside its limited ERP customer base, the back-office platform agnosticism of its e-business products should be its highest priority.

Nonetheless, the company has managed to maintain its existing customers' satisfaction level while successfully re-inventing itself, and, as a result, it has maintained a presence within the top 10 manufacturing ERP vendors in some markets. One cannot help feeling that Glovia's knowledge of its target market has always been deeper than its market visibility and share. However, while Glovia will not become a dominant market player any time soon, the abundant finances, a new focus and a revived spirit could grant a better future for the vendor.

User Recommendations

Glovia is well suited for project-based companies with versatile discrete manufacturing styles (mixed-mode) within the automotive, capital equipment, electronics, telecommunications, and industrial products industries. Companies needing software to address mixed-mode manufacturing (Engineer-to-Order through Repetitive), projects and contracts, and service management, may want to include Glovia on an initial list of vendors for a particular ERP software selection. The companies that may benefit the most from evaluating Glovia's ERP product are mid-market companies up to $400 million in revenues that are not seeking to implement a centralized global financial, purchasing and inventory management system, but are rather operations-centric. The industries of focus are the aerospace & defense, automotive, telecommunications and capital equipment. For very detailed information about glovia.com is contained in the ERP Evaluation Center at http://www.erpevaluation.com/

However, due to relatively recent restructuring and fledgling channel, potential clients should conduct thorough research on available resources and reference sites of a regional Glovia office or an affiliate service provider. Existing Glovia customers should review the above-mentioned B2B enhancements with the local Glovia representative with an eye towards extending the value of existing applications. Glovia customers with custom systems or products from other vendors should review the affiliate's development capabilities in order to gain data integration between their various systems.

New customers evaluating Glovia should consider the new modules an essential part of the Glovia product and insist on reviewing them as part of their evaluation. Current glovia.com users should position glova.e, glovia.ec, and glovia.hub central to their collaborative B2B e-Business strategies although being informed about competitive offerings is recommended as well. Non-Glovia users may benefit from evaluating the above products for their collaborative needs, as Glovia's ability to create a collaborative business process, to dynamically configure it, to run it within the bounds of the system, and to dynamically reconfigure it as required (e.g., when the business process changes) sounds compelling and might up the ante for other contesting vendors.

The firm's more recent web-based glovia.hub developments, which initially provide for B2B collaborative commerce in terms of selling and procurement, are however aimed at much larger, truly global organizations which have most to gain from the centralization and 'loose integration' of their data. We also encourage existing and potential users to familiarize themselves with the company's e-Business products offerings, since we believe that they will be in a position to better leverage their negotiating position with all vendors involved in a particular selection exercise, particularly in terms of global language translation capabilities. Given that Glovia has not yet released the ready-made interfaces to other ERP and/or legacy systems, non-Glovia users should include these factors when considering a wait and see stance with their B2B e-Business initiative:

• The urgency and the complexity level of the e-Business initiative
  
  
• The organization's internal IT resource availability to integrate B2B applications with existing back office applications
  
  
• The level of integration required between the existing back office and the Glovia e-Business applications