Enterprise System Spectator blog: ERP and enterprise system vendor evaluation, selection, and implementation.

The Enterprise System Spectator

Tuesday, November 30, 2004

Research firms face threat of "open source research"

An article in the Boston Globe today says that these are difficult times for research analyst firms such as Gartner, IDC, Forrester, and Meta Group. The article points out that corporate customers are scaling back on their purchase of paid research services. But one point especially caught my eye:
Today, cost-cutting executives are known to turn to search engines like Google to glean market intelligence on the cheap. "It's part of the Googlization of America," lamented Forrester's [Brian] Kardon. "People expect great content to be available just through a Web search."
I find this ironic. In the late 1990s, the research firms were trumpeting the threat that the Internet poses to traditional business models. Now the research firms themselves are being threatened by the Internet.

It's not that the research firms are not using the Internet. They already make great use of the Internet to deliver research content to subscribers. But so do the newspapers. And yet, the newspapers have been facing declining subscriptions for years now.

The real threat to the research firms is not the Internet as a delivery channel. It's the fact that the Internet is starting to bring together individual experts with business people that need their specific expertise. All that the individual expert needs is a self-publishing platform, such as a public forum (e.g. Slashdot) or blogging tools (e.g. Blogger, Moveable Type, etc.). All that the businessperson needs is a search engine, such as Google or Yahoo. This is the "Googlization of America" that Brian Kardon at Forrester is complaining about.

I see this every time I post a new article. For example, suppose I write a post on the subject of, say, Walmart's use of RFID. In less than 10 minutes there will be visitors that have been alerted to this post through my XML feed and will start hitting this web site. And, within 24-36 hours, the major search engines will have spidered the post and a second group of visitors will be finding it. If it's a pretty good post, I may then pick up two or three new subscribers to my weekly e-mail version. (Check the right hand column if you'd like to subscribe, by the way).

Why do I do this for free? Frankly, because the good will and publicity is worth more to me and my firm than anything I could possibly earn by charging a fee to access the Spectator.

What's happening today is that research firms are facing the threat of what I call "open source research"(1). Just as commercial software vendors, such as Microsoft, are facing competition from free open source alternatives such as Linux, so also the paid research firms are facing competition from new free public sources of technology information, such as public forums and blogs.

Now, I do not mean to belittle the work of the research firms. I have met a number of analysts, and I think they are smart and insightful. But the point is that, for the businessperson that just wants a piece of information, or a perspective on a certain subject, there are alternatives to paid research. You'll have to dig, and you'll have to take some of it with a grain of salt, but you now have a way to find individual experts without having to buy a whole package of research services.

Is this the death of paid research? I don't think so. The IT research industry won't disappear, just as there will always be a place, even a dominant place, for commercial software vendors. But it's going to be harder to make money.
Because of open source research alternatives, research firms are going to find it difficult to charge the same prices that they've been able to charge in the past. They're going to have to give more of it away for free, or for a nominal price, and save premium pricing for the stuff that only a paid research firm can produce, such as market share studies.

As a result, there is already a consolidation trend taking place among technology research firms, such as Forrester's acquisition of Giga Information Group a couple years ago. As open source research gets better, the trend can only continue.

Related posts
Aberdeen: new poster child for sloppy research
Memo to Forrester
About the Enterprise System Spectator
Spectator takes eighth place in TechWeb contest

Footnotes:
(1)The concept of "open source research" is analogous to "open source journalism," a term that appears to have been first used in a 1999 article in Salon by Andrew Leonard. "Open source journalism" was more recently used by Hugh Hewitt to refer to informal networks of news-oriented bloggers that in some cases have been out-hustling the mainstream news media in developing breaking stories. I think that a similar trend may soon develop in IT research, or other types of professional research services for that matter.


Update, Jan 2. Corrected footnote to credit Salon source.

by Frank Scavo, 11/30/2004 06:14:00 PM | permalink | e-mail this!

Subscribe!

Read/post comments!
(1) Links to this post

Thursday, November 25, 2004

Oracle lawsuit to overturn PeopleSoft defenses will continue in December

PeopleSoft and Oracle were back in a Delaware courtroom yesterday, in Oracle's lawsuit to overturn PeopleSoft's poison pill defense as well as its Customer Assurance Program. The Customer Assurance Program throws up an additional barrirer to Oracle because it obligates Oracle to pay massive refunds in the event that Oracle reduces support for PeopleSoft products. The judge wants more testimony in December.

Most observers think that the judge is unlikely to rule in Oracle's favor, setting up the parties for a proxy fight at Oracle's annual meeting in the spring. However, some observers think that the fact that the judge is asking for more testimony indicates that he hasn't made up his mind: a good sign for Oracle.

But what is most interesting to me is the fact that PeopleSoft wanted the judge to defer the trial until the new year, so that it could close critical fourth-quarter deals without having the judge possibly overturn the Customer Assurance Program.

This indicates, to me, that PeopleSoft intends to push hard for revenue in the fourth quarter, hoping to exceed analyst estimates and strengthen its case in the event of a proxy fight.

So, if you are considering an enterprise system purchase, PeopleSoft is no doubt making some great deals between now and December 31--if you are willing to face the strong possibility that your new vendor partner will soon be acquired.

The San Francisco Chronicle has the latest on the Delaware case.

Related posts
Flash: PeopleSoft shareholders tender majority of shares to Oracle
Possible outcomes of Oracle's takeover bid for PeopleSoft
Oracle questioning PeopleSoft's revenue recognition policy

by Frank Scavo, 11/25/2004 08:21:00 AM | permalink | e-mail this!

Subscribe!

Read/post comments!
(0) Links to this post

Sunday, November 21, 2004

SAP increasing dominance in the enterprise software market

Reader Lewis Marchand wrote to me recently that, in the protracted battle between Oracle and PeopleSoft, the only winner is SAP.
SAP is clearly the only winner in the short term. While Oracle and PeopleSoft are distracted and confused, SAP is running around gathering up more clients.
Confirming Lewis's view, a Barrons cover story this weekend (subscription required) has some startling statistics on SAP's continued increase in market share.
Right now, the company's most impressive growth is coming from the U.S. As Oracle CEO Larry Ellison has carried out a protracted bid to acquire PeopleSoft...SAP steadily has raised its profile in the U.S. business market. It now accounts for 38% of its peer group's U.S. revenue, up from 32% just a year ago. And SAP has told analysts it expects its U.S. share to surpass 50% reasonably soon and then head toward the company's global share.
According to Barrons, SAP's global market share among the top five enterprise vendors is currently 54%, but it could reach 64% by the end of this year. The only other tech companies with that kind of market dominance are Microsoft and Cisco.

As a consultant to buyers of software, I don't especially like to see such market dominance by one player. I'd much rather see more competition. On the other hand, sometimes you have to deal with things they way they are, not the way you'd like them to be.

Related posts
SAP keeps on keepin' on

by Frank Scavo, 11/21/2004 08:31:00 AM | permalink | e-mail this!

Subscribe!

Read/post comments!
(0) Links to this post

Saturday, November 20, 2004

Flash: PeopleSoft shareholders tender majority of shares to Oracle

Midnight tonight (Eastern time) was Oracle's deadline for shareholders to tender their shares, or else it would walk away from its proposed takeover of PeopleSoft. Oracle has just announced that over 60% of shareholders have accepted its bid.

No, I wasn't staying up late awaiting the results. But I did think to check the news wire, just now.

Oracle's success does not mean that the battle is over, however. Oracle still needs to overcome PeopleSoft's poison pill defense. An Oracle lawsuit to do so is awaiting decision by a Delaware court, expected this coming week, but most experts do not expect Oracle to prevail. That means that Oracle will need to wage a proxy battle next spring to win control of PeopleSoft's board.

Of course, at any point, PeopleSoft's board could decide to give in to Oracle. But that's unlikely, based on the board's rejection of Oracle to date. On the other hand, shareholders that have tendered their shares are still free to withdraw their shares. So, this thing still isn't over, by any means.

Although the outcome is not certain, Oracle is closer to its goal tonight than it was a few hours ago.

TheStreet.com has a summary of the results of Oracle's tender offer tonight.

Update, 1:00 p.m. The Wall Street Journal, in its online edition (subscription required), has some interesting analysis of the impact of an Oracle takeover on PeopleSoft customers, specifically customers of the JDE product lines:

[E]ven if Oracle completes the acquisition, making it pay off may not be easy. Oracle has said it will continue enhancing PeopleSoft's core software, developing an update it calls PeopleSoft 9. But it has been less specific about the EnterpriseOne and World products PeopleSoft acquired through its merger with J.D. Edwards.

In a survey conducted last week, AMR Research found many PeopleSoft customers have reservations about a merger. AMR Vice President Bill Swanton said 150 customers were contacted, the majority of which used J.D. Edwards products.

Sixty-three percent said they would stop paying maintenance fees to Oracle either immediately or if Oracle stops enhancing their products, provided they could find maintenance from a third party. Forty-seven percent said they expected Oracle to add no new features to their software, suggesting an unease with the merger.

"The danger is [Oracle's] maintenance revenue is much less than they are assuming, or the expenses of maintaining the products to ensure renewals are much greater than they are assuming," says Mr. Swanton.
Last week, I speculated that if Oracle is successful in acquiring PeopleSoft, it might be tempted to sell off the JDE product lines. I've not heard anyone else mention this possibility, but if it is true that a significant number of JDE customers are planning to cut off maintenance, that would give a real incentive to Oracle to sell off those products immediately. Who do I think would be interested in buying the JDE products? See my post last week.

Related posts
Possible outcomes of Oracle's takeover bid for PeopleSoft

by Frank Scavo, 11/20/2004 12:01:00 AM | permalink | e-mail this!

Subscribe!

Read/post comments!
(1) Links to this post

Friday, November 19, 2004

More on the role of Excel in supply chain planning

If you are following the discussion on "Excel as the poor man's i2," check out the update at the end of the original post (scroll down, below). An executive from i2 has responded, advocating a blended approach.

Related posts
Is Excel the poor man's i2?

by Frank Scavo, 11/19/2004 09:52:00 AM | permalink | e-mail this!

Subscribe!

Read/post comments!
(0) Links to this post

Thursday, November 18, 2004

Making SOX compliance a meaningful exercise

Last week I wrote that Sarbanes-Oxley compliance efforts are too often a wasted effort. Now I've got some confirmation from a reader on the front lines.

"Richard" (not his real name) works for a large well-known company that is proudly claiming its compliance with SOX Section 404 (internal controls). But according to Richard, the benefits do not justify the cost:

Frank, yes, Sarbanes-Oxley is a LOT of work--too much! And no, it doesn't give any additional protection, if you ask me. The internal controls that we've implemented in IT really don't mean much.

Let me illustrate with one example. Our company has implemented an internal control that says a developer cannot directly modify production data. So now we stand next to the user administrator's desk while he runs the SQL we gave him. He has no idea what he is running, but since it is done under his login it is "SOX compliant!"

This is a big productivity drain. Two people are now needed to do something that one person could have done before, it is sometimes difficult to coordinate schedules, and frequently the production data mods are time critical. So now everyone is running around like chickens with their heads cut off trying get some simple UPDATE statement executed.

Well, Congress is full of lawyers and accountants and constantly is lobbied by them as well. So we know who is making money from SOX compliance--the lawyers and the accountants!
The situation that Richard describes is typical of compliance efforts that focus on the appearance of compliance but not the intent of the regulation. In this case, one must ask, what risk to the business is this internal control intended to mitigate? Apparently, Richard's firm thinks that IT personnel may inadvertently (or deliberately!) corrupt the firm's electronic records. The company has therefore implemented a policy that forbids programmers from running special programs to directly alter live files. However, the procedure allows a user with proper access rights to run the exact same program. But since the user doesn't understand the program, he or she has no way to verify that the program will not corrupt the database. Therefore, this internal control might look good on the surface to an auditor that is not familiar with IT security. But it doesn't mitigate any risk to the firm. Rather, it just creates inconvenience.

What would be more effective is in this case would be a meaningful combination of protective measures. First, there should access controls to prevent programmers from updating live files, plus a procedure that requires programmers to submit all update programs to a database administrator. The procedure should call for the programmer to submit documentation as to the need for the update along with test results. There should also be a database audit trail produced to record the results of the live update, and a contingency plan in the event that errors are found after the update (e.g. a backup/restore procedure, or other way to back out the changes). These measures would greatly mitigate the risk of data corruption with three types of controls: preventive controls (limiting the update rights of the programmer, separating the duties of the programmer vs. the DBA, and requiring testing of update programs), a detective control (the audit trail), and a corrective control (the contingency plan). Putting a user in the middle of the process adds nothing.

The trend toward meaningless compliance is not limited to Sarbanes-Oxley. I have written previously about the same problem with FDA regulatory compliance in software validation, where companies spend long hours and generate reams of test results to demonstrate that they have "validated" computer systems that support regulated functions, such as drug manufacturing. Yet the systems are not more trustworthy and reliable when they are finished with their "validation."

Government is increasing and will continue to increase regulation of business functions in general, and computer systems specifically. Sarbanes-Oxley, HIPAA, and FDA regulations, to name just three, have enormous impact on IT departments. It is tempting to treat compliance as a formality--what is the minimum I need to do to pass an audit? But if we don't focus on the risk to the business and the intent of the regulation, we will just continue to add to the cost of doing business without any meaningful protection.

Related posts
Sarbanes-Oxley compliance: too often a wasted effort
Sarbanes-Oxley spotlights need for controls in IT
Turning software validation into a meaningful exercise

by Frank Scavo, 11/18/2004 10:36:00 AM | permalink | e-mail this!

Subscribe!

Read/post comments!
(0) Links to this post

Monday, November 15, 2004

Spectator takes eighth place in TechWeb contest

Well, the results are in, and this blog came in eighth out of ten finalists for the First TechWeb Network Best Independent Tech Blog Readers Choice Awards. The competition was very tough, with the venerable Slashdot and Groklaw competing, each with tens of thousands of hits every day. So, I'm pleased with the results, even if it means I won't be getting a year's supply of Starbucks (the first prize).

Check out the "slayer of sacred cows" summary that TechWeb wrote for the Spectator along with some very kind comments from voters:
It provides information that can be readily used with a little or no further analysis.

Perceptive and interesting analysis on key issues in the systems world.

As a consultant in the industry I appreciate the content particularly the behind the scenes comments on industry mergers

Frank is honest and reputable. Plus he knows his stuff.

It's one of the few blogs that keeps me coming back. Often, I hear news first from Frank.

The blog has the latest update on the ERP industry and lot of industry insights.
Thanks again to all who took the time to vote!

Related posts
About the Enterprise System Spectator
The Spectator makes it to the TechWeb Top Ten
Vote for me!

by Frank Scavo, 11/15/2004 01:21:00 PM | permalink | e-mail this!

Subscribe!

Read/post comments!
(1) Links to this post

Is Excel the poor man's i2?

Enrico Camerinelli from Meta Group wrote me this week with a hypothesis that's not going to sit well with the supply chain planning (SCP) vendors.

In the market for SCP software, it could be argued that the market leader is not i2, Manugistics, or SAP, but Microsoft Excel. Many companies never look at the leading SCP vendors, finding that it's much simpler, easier, and certainly less expensive to simply create an Excel model to plan short term production around one or two key constraints.

Enrico says that the advantages of using Excel are many:
  • Overall ease of use.


  • Allows the planner to use his knowledge and experience to create a model that is highly relevant and specific to the problem.


  • Allows the planner to quickly generate multiple scenarios.


  • Allows the planner to tweak the results if needed.


  • Allows the plan to be annotated to explain the results or provide clarification.

The downside, of course, is that an Excel model for supply chain planning is likely to be disconnected from backoffice systems, creating extra work to download or rekey data to the model and to import the results of the approved plan back into the production system.

So, what do you think? Do you think that using Excel is a viable alternative to buying a costly SCP system? Click on the comments link below and give your view. Or send me an e-mail.

Update, Nov. 19: Karthik Mani, a VP at i2, saw this post and wrote his own post regarding the advantages and disadvantages of Excel for supply chain planning. He writes,
Excel has its advantages. Some of them are
  1. Familiar interface. Planners use it every day.

  2. Desktop availability very similar to web, but planners can display a lot more data than can be provided in a standard web based tool.

  3. Very easy configurability for the end user - layout, pivots, filtering, graphs, logical functions, math functions.

  4. Very easy availability of skilled resources to help end users with more sophisticated changes to the engine.
But Excel based planning also has its big disadvantages
  1. In even medium sized enterprises, multiple people are responsible for coming up with the operational plans (demand plan, staffing plans, production plans, logistics plans etc.) and Excel based planning is very poor at synchronizing those plans.

  2. Excel models will be disconnected from the back office systems leading to painful keying in of master data.

  3. Enterprise has no control over assumptions and logic used in the planning process.

  4. Communication of metrics (this quarter we need to focus on revenues rather than market share and profitability, next quarter we need to focus on market share rather than profitability and revenue) is very tough.
Karthik thinks that the ideal approach is to marry the use of Excel with a best-in-class SCP solution. As an executive at i2, it's not surprising that this would be his view. But I think it does make a lot of sense. He continues,
The best in class SCM solutions have now moved to marry the advantages of both of these approaches. Here you have a central data and plan synchronization infrastructure. The front end exposed to the users is Microsoft Excel. Some of the light planning logic can be directly incorporated into the Excel sheet; all of the reasonably sophisticated calculations will reside in engines that will be available to the spreadsheets as web services.
Read Karthik's post on his weblog.

by Frank Scavo, 11/15/2004 07:02:00 AM | permalink | e-mail this!

Subscribe!

Read/post comments!
(2) Links to this post

Thursday, November 11, 2004

Possible outcomes of Oracle's takeover bid for PeopleSoft

It appears that, in eight days, we'll know the likely outcome of Oracle's fight for PeopleSoft. Earlier this month Oracle raised its tender offer to PeopleSoft to $24 per share, from $21, and said that $24 was its best and final offer. PeopleSoft's board rejected it. Now this week Oracle is appealing directly to shareholders, saying that if 50% of PeopleSoft shares are not tendered by November 19, Oracle will walk away.

What happens if Oracle walks?
My prediction is that there will be an initial drop in PeopleSoft share price as the immediate prospect of a buyout at $24 disappears, followed by an increase over the next twelve months as PeopleSoft's business gradually improves. In spite of PeopleSoft's earlier claims to the contrary, the threat of an Oracle takeover has been a huge impediment to PeopleSoft license sales. I believe that once the uncertainty about PeopleSoft's future is resolved, there will be a better than expected increase in PeopleSoft license sales. It may take two or three quarters to materialize, as PeopleSoft is put back on short lists, but I think it will be the vendor comeback story of 2005.

If Oracle walks away, however, there is still the open matter of PeopleSoft's lawsuit in California against Oracle for unfair business practices. I'm not a lawyer, but my layman's opinion is that PeopleSoft has a legitimate claim that Oracle deliberately set out to damage PeopleSoft's business, which would be an "unfair" business practice in California. I base this opinion on evidence introduced in the Delaware lawsuit. See my post earlier entitled, "Oracle confidential information released by court", to see some examples. PeopleSoft is suing Oracle for $1 billion, plus punitive damages, and the case is scheduled to go to trial before a jury in Oakland on January 10, 2005. Now, that will be interesting. Be ready to see more of the dark underbelly of software vendor sales tactics.

What happens if Oracle wins?
First, it won't be over on November 19, because Oracle still needs a favorable ruling in the Delaware case. However, let's assume that Oracle is successful there as well and that Oracle takes over PeopleSoft. My prediction is that the impact on PeopleSoft customers will be non-existent. More than anything, Oracle is buying the PeopleSoft's customer base, not its software. Oracle may be aggressive, but it's not stupid. Oracle will not do anything to alienate PeopleSoft customers, even if it succeeds in nullifying PeopleSoft's customer assurance program.

I'm going to go out on a limb here and make a second prediction that Oracle will quickly spin off the PeopleSoft Enterprise One and World product lines (formerly J.D. Edwards). The bulk of the former JDE's customers are on the IBM iSeries platform (formerly AS/400), and Oracle will have zero interest in maintaining that platform. Selling off that product line will give Oracle some cash back on the deal and fund other acquisitions (e.g. BEA?) that are more strategic to Oracle.

If Oracle were to sell off the JDE product lines, who would be the buyer? I don't think those products could stand on their own as an independent company (i.e. JDE II). The prospective buyer that makes most sense to me is SSA Global. SSA has been gobbling up distressed iSeries ERP vendors, and the JDE products would fit nicely in that portfolio.

If that scenario plays out, remember that you heard it here first.

Update, Nov. 13. PeopleSoft apparently believes that Oracle is likely to succeed in its tender offer: PeopleSoft said earlier this week that it has hired a firm to solicit proxies from shareholders in support of its own slate of directors at its annual meeting next spring, to fight any opposing slate nominated by Oracle. This development means that PeopleSoft's ultimate fate will likely not be known soon. Not a good sign for PeopleSoft license sales.

Related posts
Oracle confidential information released by court
Duffield: PeopleSoft not for sale
Why PeopleSoft fired CEO Conway
Oracle questioning PeopleSoft's revenue recognition policy
Revenue recognition problem in PeopleSoft's refund offer to prospects?

by Frank Scavo, 11/11/2004 08:34:00 AM | permalink | e-mail this!

Subscribe!

Read/post comments!
(0) Links to this post

Wednesday, November 10, 2004

Sarbanes-Oxley compliance: too often a wasted effort

CFOs and CIOs are working hard on Sarbanes-Oxley (SOX) compliance these days. In every public company I visit, there are projects underway to audit, design, and test internal controls that back up corporate financial reporting, as required by SOX Section 404. IT departments play a large part in these projects because, in practice, many of these internal controls are implemented in software. The effort is huge, but it's worth the cost if it makes public companies more transparent and accountable to investors.

But according to Ira Solomon and Mark Peecher at the University of Illinois, the investment is largely being wasted. In a Wall Street Journal article (Nov. 9), they write, "There's not a shred of evidence that the stringent new rules will help protect the investing public."

According to Solomon and Peecher, there are two problems. First, most of the focus on internal controls is at lower levels of the organization. But the "lootings" that took place at companies such as Enron and WorldCom didn't happen down in the trenches but took place at the executive level, where controls "can be stealthily overridden by C-suite members."

I pointed out this issue over two years ago in a post entitled, "Memo to Forrester," where I criticized the analyst firm, in part, for promoting sophisticated technology solutions for preventing corporate fraud precisely because they wouldn't address cheating by top management.

The second problem, which to me is even more significant, is that too many internal controls are focused on historical events rather than forward-looking early-warning signals. Solomon and Peecher write,
Decreased production quality, for example, can result in unprecedented returns that go unnoticed in the accounting system until many customers begin requesting return authorizations.

The narrowness of SOX 404 controls also is evident when one reads complaints in major lawsuits against public companies and their auditors. Therein, one often finds allegations that management's business-controls, i.e., their dashboards of key performance indicators, had signaled dangerous changes in their operations. But, management did not publicly disclose these warning lights: a number of key stores were about to close, a home-run drug was about to be excluded from Medicaid formularies, major customers had just walked away, and so on.
From an IT perspective, I like the authors' focus on controls over the business, rather than just controls over financial reporting. In IT departments that I visit, much of the effort in SOX compliance appears to be narrowly focused on documentation and ensuring that there are adequate policies and procedures around IT security and disaster recovery.

These areas are important, of course. But I'd like to see more energy spent asking questions like, "What systems can we implement to give management the performance metrics they need to spot problems before they impact they business?" If just a portion of the the millions of dollars spent on SOX compliance was directed toward forward-looking performance reporting, the investment would pay off enormously. Shareholders would receive not only better financial reporting, but better business performance and return on investment.

Related posts
Memo to Forrester
Checklist for Sarbanes-Oxley compliance
Sarbanes-Oxley spotlights need for controls in IT
Cost of SOX compliance isn't mainly in new systems
In spite of relaxed deadline, SOX is giving urgency to some IT initiatives
Is Sarbanes-Oxley the new Y2K?

by Frank Scavo, 11/10/2004 08:53:00 AM | permalink | e-mail this!

Subscribe!

Read/post comments!
(0) Links to this post

Monday, November 08, 2004

Functionality is dead

Erik Keller at AMR continues to hit the mark, in my opinion. In a research note entitled, "Functionality is dead", he makes the case that what software buyers are really interested in these days is not more functionality that they probably won't be used anyway but ease of use.
[W]hile technological and functional requirements are important, so too are applications that will be embraced by real people. One of the largest problems that enterprise applications have is that they are too hard to use. For such applications, if users can avoid them to get their job done, history has shown that they will. This truth has manifested itself in countless enterprise applications being used the bare minimum, which has made it harder for IT organizations to show a positive return on their investment.
Keller points to simple applications such as Microsoft's sales force automation product and salesforce.com as examples of simple, easy-to-use applications, especially when compared to complex CRM products such as Siebel's and PeopleSoft's.

I've often said that a simple application that actually gets used is far better than a sophisticated application that sits on the shelf.

Related posts
ERP implementation: putting processes and people first
Four problems with ERP
Solving the four problems with ERP
Business changes needed to ensure enterprise system success
Executives hesitate to recommend their ERP vendors

by Frank Scavo, 11/08/2004 02:08:00 PM | permalink | e-mail this!

Subscribe!

Read/post comments!
(0) Links to this post

Monday, November 01, 2004

Manugistics prepping itself for the auction block?

Speculation is growing that Manugistics may be preparing itself for sale. The latest hint is Manugistics' adoption of a shareholder rights plan, otherwise known as a poison pill, which it said was intended to prevent "unfair takeover strategies." PeopleSoft is currently using its own poison pill defense in its battle to prevent a takeover by Oracle.

In the case of Manugistics, however, analysts are speculating that the poison pill is intended to give Manugistics leverage in negotiations with prospective buyers, while frustrating hostile bidders.

Manugistics has had a rough few years. In the late 1990s, it was one of the two or three top names in supply chain management. But license revenue has been dropping since 2000: down 12% in 2001, 20% in 2003, and 3% in 2003, according to Gartner.

Among possible buyers, the most interesting is PeopleSoft. PeopleSoft, of course, is in the midst of fighting its own takeover battle with Oracle. But acquisition of Manugistics would make PeopleSoft bigger and more difficult for Oracle to acquire, in addition to shoring up PeopleSoft's own SCM offerings.

Other companies that are mentioned as possible buyers of Manugistics include Oracle, which has said that it will continue its acquisition strategy regardless of what happens with PeopleSoft; Manhattan Associates, which has been particularly strong in the supply chain execution space--combining with Manugistics would fill out Manhattan's offerings nicely; SSA Global Technologies, which already owns EXE, another strong supply chain execution product.

Related posts
Who's next in the vendor consolidation trend?
Leading SCM vendors continue to tank
Manugistics V7 seeks to deliver profit optimization in small bites

by Frank Scavo, 11/01/2004 02:50:00 PM | permalink | e-mail this!

Subscribe!

Read/post comments!
(0) Links to this post

Powered by Blogger

(c) 2002-2014, Frank Scavo.

Independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them.

About the Enterprise System Spectator.

Frank Scavo Send tips, rumors, gossip, and feedback to Frank Scavo at .

I'm interested in hearing about best practices, lessons learned, horror stories, and case studies of success or failure.

Selecting a new enterprise system can be a difficult decision. My consulting firm, Strativa, offers assistance that is independent and unbiased. For information on how we can help your organization make and carry out these decisions, write to me.

For reprint or distribution rights for content published on the Spectator, please contact me.


Go to latest postings

Custom Search

Join over 1,700 subscribers on the Spectator email list!
Max. 1-2 times/month.
Easy one-click to unsubscribe anytime.

Follow me on Twitter
My RSS feed

AddThis Feed Button


Computer Economics
ERP Support Staffing Ratios
Outsourcing Statistics
IT Spending and Staffing Benchmarks
IT Staffing Ratios
IT Management Best Practices
Worldwide Technology Trends
IT Salary Report
IT Help Desk/Service Desk Management

Get these headlines on your site, free!


Awards

2013 Best ERP Writer - Winner

Alltop. We're kind of a big deal.
 
Constant Contact 2010 All Star Technobabble Top 100 Analyst Blogs


Blog Roll and Favorite Sites
Strativa: ERP software vendor evaluation, selection, and implementation consultants, California
StreetWolf: Digital creative studio specializing in web, mobile and social applications
Vinnie Mirchandani: The Deal Architect
Oliver Marks' Enterprise 2.0 Blog
Si Chen's Open Source Strategies
diginomica
CISO Handbook


Spectator Archives
May 2002
June 2002
July 2002
August 2002
September 2002
October 2002
November 2002
December 2002
January 2003
February 2003
March 2003
April 2003
May 2003
June 2003
July 2003
August 2003
September 2003
October 2003
November 2003
December 2003
January 2004
February 2004
March 2004
April 2004
May 2004
June 2004
July 2004
August 2004
September 2004
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
November 2005
December 2005
January 2006
February 2006
March 2006
April 2006
May 2006
June 2006
July 2006
August 2006
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2009
February 2009
March 2009
April 2009
May 2009
June 2009
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009
January 2010
February 2010
March 2010
April 2010
June 2010
July 2010
August 2010
September 2010
October 2010
November 2010
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011
July 2011
August 2011
September 2011
October 2011
November 2011
December 2011
January 2012
February 2012
March 2012
April 2012
May 2012
June 2012
July 2012
September 2012
October 2012
December 2012
January 2013
February 2013
March 2013
May 2013
June 2013
July 2013
September 2013
October 2013
December 2013
January 2014
February 2014
March 2014
April 2014
Latest postings