ERP vendors looking to SaaS to bypass competition | The Business Management Blog

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ERP vendors looking to SaaS to bypass competition

7/9/2012 at 12:47 pm by

Forrester Research recently published a blog post revealing that more vendors are betting big on Software-as-a-Service-based ERP business solutions, fueling market trends and competition as a result. The research firm indicated that many EPR providers have gone all-in with SaaS deployments in the past year, and clients, especially small and medium-sized businesses, are taking notice of this positioning.

"They're now working to deepen the functionality of those apps to appeal to a broader, more enterprise audience," Forrester explained. "There are two key approaches: expand the scope of an existing SMB product and aim it up market or carve off functionality from a SaaS midmarket apps suite – while retaining that suite – and create a new enterprise app."

ERP vendors are also considering entering other markets by leveraging Platform-as-a-Service or Integration-as-a-Service platforms, as well as increased PaaS partnerships to offer SaaS solutions, the firm said.

Other providers are acquiring SaaS applications to enter certain fields they previously did not have a presence in. By doing so, vendors can gain valuable knowledge and experience associated with SaaS support, marketing and sales to further adoption of the solutions, Forrester noted. Once these apps are launched or acquired, ERP vendors generally look for avenues to establish an application ecosystem to support the solution, such as app stores, add-ons and other channels.

SaaS ERP success may also benefit cloud adoption

As vendors position themselves to offer SaaS apps to more clients, this development may have a great impact on the overall cloud computing industry. A recent TechTarget report noted that the success of SaaS in the ERP industry could result in more businesses adopting the cloud and trusting the technology.

Bill McNee, founder and CEO of consultancy Saugatuck Technology, said chief financial officers are generally very conservative when it comes to technology deployments, which may be the reason some businesses have not adopted the cloud. However, as older systems become outdated, more companies are looking to upgrade to SaaS or cloud-based solutions, the news source reported.

For small businesses, this advanced technology is even more desirable. Craig Schiff, CEO of advisory services firm BPM Partners, said more of these companies are turning to the cloud because of shorter upgrade time requirements and to take advantage of the solution's subscription pricing model, according to TechTarget.

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The Sage ERP team report on various topics related to ERP and business management.

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