SSA
Seeks Support from Synquest
S. McVey - October
1st, 1999
Event
Summary
On Sept. 28,
System Software Associates announced a joint marketing and development agreement
with SynQuest, Inc. The deal will enable SSA to sell SynQuest Manufacturing
Manager software to its existing customer base and to prospective customers
globally. In addition, both companies will jointly develop software to integrate
SynQuest Manufacturing Manager software with eBPCS, SSA's enterprise resource
planning (ERP) application suite. The arrangement will target discrete manufacturing
industry segments, which account for about 50 percent of SSA's installed base.
Market
Impact
Occurring less
than a month after rival mid-market ERP vendor J. D. Edwards announced a similar
alliance, SSA's move is an attempt to reverse the lack of market enthusiasm
for its Unix products, a major contributor to the company's financial distress.
SynQuest offers a mature Unix-based supply chain management product focused
squarely on the discrete manufacturing and high tech industries. Although SSA
developed a Unix product as early as 1993, the first release, BPCS Client/Server
5.1, achieved almost no market acceptance. Version 6.0 followed in April 1996,
but has accounted for less than 15% of license revenues in recent years. With
flagging revenues from its large AS/400 customer base, SSA is desperately seeking
acceptance of its Unix and NT platforms in order to stave off further financial
decline. To be successful, SSA must combat offerings from more dominant vendors
SAP, Oracle, PeopleSoft and even Baan, all of whom are aggressively pursuing
the mid-market. J. D. Edwards, though later to market with its own Unix-compliant
offering, OneWorld (late 1996), has managed to make some inroads into the Unix
market.
In the short
term, SynQuest is unlikely to derive significant benefits from the alliance
as the existing BPCS Unix installed base is very small. If the companies are
successful in quickly integrating their products, then SSA gains an advantage
only if it can convince its existing customer base to consider at least a partial
move to Unix or NT. The success of the alliance depends heavily on new SSA Chairman
and CEO Robert Carpenter's ability to improve execution of the company's product
development organization.
User
Recommendations
While current
BPCS users should look favorably on the planned joint development, it will be
at least six months before a stable integrated product emerges. At that time,
only users in the discrete manufacturing, high tech, or perhaps automotive industries
should consider purchasing SynQuest Manufacturing Manager. Mid-market companies
that wish to move to an ERP system that contains integrated supply chain management
capabilities should steer clear of SSA until it can demonstrate a return to
financial viability.