Sage joins JBOPS in ERP mid-market crush

Sage Software is aiming to dominate the mid-market enterprise resource planning (ERP) space as the vendor plans to expand on its entry level dominated customer base and leverage its recent acquisition of customer relationship management (CRM) vendor, Interact Commerce.

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By  Matthew Southwell Published  September 26, 2001

|~||~||~|Sage Software is aiming to dominate the mid-market enterprise resource planning (ERP) space as the vendor plans to expand on its entry level dominated customer base and leverage its recent acquisition of customer relationship management (CRM) vendor, Interact Commerce.

However, the mid-market, which Sage sees as growing between 30-35% in the next three years, is becoming ever more saturated with vendors as it becomes a 'must have' market segment. As a result, the traditionally entry level players — such as Sage —are looking to move up while the high end players — JD Edwards, Bann, Oracle, PeopleSoft and SAP (JBOPS) — are looking to move down.

The driver for this trend appears to be the relative stability of the mid-market in a global economy currently characterised by stagnation.

"The mid-range market does seem to be remaining buoyant and what we are experiencing is that the larger organisations, the JBOPS, have to become more efficient due to the changing economic situation," says Steve Bailey, managing director, Sage Software, enterprise solutions.

In fact, the state of play among the high-end operators and their approach to this market segment appears to be the launch pad for Sage's mid-market plans. "The high-end is so narrow and the middle space so large that if they [the JBOPs] do not come down then they will not sell [enough software]," explains Bailey.

He adds that even though the high-end vendors are coming down to the mid-market, Sage has the tools and experience to win out. Amrit Chopra, managing director, Sage Software, Middle East, explains that the problem with the JBOPS is that they have stripped down the cost for the mid market but not the complication of implementation. "Price stripping is not the solution," he says.

The global mid-market landscape translates itself particularly well to the Middle East, as the gigantic corporations that dominate in Western markets have no local counterparts.
"The truth is that in the Middle East… even the large organisations are at the mid market level, says Chopra. "[This means] that there are no true prospects for the big guys at all."
Bailey concurs: "The JBOPS products are often inappropriate for deployment in this territory due to the size of the subsidiaries or operations that are working here. They try and fit a SAP implementation into a business of 100 people and it is like trying to fit a banana up a straw - it just doesn't work," he says.

Whether or not Sage's anti-JBOPS spiel will translate into market success remains to be seen. However, a number of its criticisms do stand up to further investigation.
At the end of June JD Edwards unveiled plans to tailor its advanced planning solutions for mid-market enterprises by offering them 'one module at a time' while Oracle has recently unveiled its hosted small-and-medium sized business (SMB) apps to tackle the market. In addition to the JBOPS there is also the small matter of Microsoft Great Plains, which is also chasing the same market segment.

Oracle's announcement was met with a less than warm response from the analyst community, with Gartner Group claiming that its Small Business Suite faces an uphill battle to build its credibility.

In contrast, Gartner Group’s view of Sage's efforts in the mid-market is positively glowing. "Sage continues to gain mid-market momentum with its collaborative Enterprise suite, and it also knows how to support customers in the market's low end," it states.

When it comes to the thorny issue of Microsoft Great Plains, Bailey is positive: "It is an interesting scenario. Microsoft work with everyone and anyone, and while taking Great Plains into that space will be difficult it could well open up the market." If it does, Bailey says that Sage is more than ready to capitalise. "This plays into our strengths because we are far more effective and efficient due to our cost and speed of implementation."||**||

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