It may only make up around 2% of the market at the moment, but Cloud-based ERP is set to grow by about 21% annually through 2015, according to research firm Forrester.
The analyst firm's State of ERP in 2011 report found that IT departments now have a wider choice of add-ons for existing enterprise applications, and a greater choice in deployment options with Cloud-based offerings having particular appeal. The report notes:
But it's the hybrid Cloud approach that is likely to dominate. Forrester argues that there is an increase in interest in running different ERP deployment models across an organization to take advantage of the merits of SaaS in one area and on-premises in another. It notes:
The research firm argues that there are three main business process drivers dictating the pace of change in the ERP market in 2011:
- More choice in how to consume ERP apps. A variety of deployment options, including managed hosting, partner hosting, and pure SaaS, are on offer alongside traditional on premise systems while two-tier ERP, where organisations hook lighter-weight ERP systems into the enterprise ERP systems apps at its corporate headquarters, offers another variant.
- More flexibility in tailoring ERP apps. ERP vendors’ interest in both offering graphical workflow/business process management suite (BPMS) tools and Platform as a Service (PaaS) Cloud environments is increasing. PaaS makes Cloud -based ERP more customisable and widely attractive.
- More access to data held in ERP apps. Many ERP vendors are overhauling user interfaces, embedding additional analytics capabilities, and simplifying reporting.
In terms of the commercial landscape, SAP and Oracle still dominate the market ahead of Sage Group, Infor, and Microsoft Business Solutions, with none of the three followers expected to see “significant organic growth”. One change that will occur is the promotion of Infor to third place once its takeover of Lawson Software is completed, enabling it to compete more aggressively in the enterprise space.
Epicor, Exact, IFS, Kingdee International Software Group, Lawson, NetSuite, QAD, Totvs, and Unit4 (formerly Agresso) round out the top 15 ERP vendors by revenue.