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by Jeff Moad, MA Editorial Staff   It would be hard for competitors not to notice that SAP and Oracle are ratcheting up their focus on the small- and medium-sized enterprise market. All they have to do is walk through any major metropolitan airport where billboard ads touting the large vendors' devotion to the SME space are plastered across every terminal.
Still, despite the high-profile SME marketing campaigns of SAP and Oracle, many enterprise applications vendors that have long targeted small- and medium-sized manufacturers — providers such as CDC Software, Epicor, Glovia, IFS, Infor, IQMS, Lawson, and Microsoft — seem to be doing just fine. That's, at least in part, because many of these smaller vendors have managed to carve out niches for themselves in manufacturing industries by adding deep vertical-specific functionality to their products.
"SAP and Oracle, so far, haven't posed that much of a threat to the Infors and Epicors of the world, because those vendors have done a good job of building best-of-breed, industry-specific stuff into their products and establishing themselves in given verticals," says Ray Wang, an analyst at Forrester Research. "If you are an auto parts supplier, Glovia has the best functionality. If you are in life sciences and you need to conform to CFR Part 11 [regulations], IFS has really good products."
A good example of a smaller SME-focused vendor successfully pursuing a vertical strategy is CDC Software, whose Ross Enterprise suite targets process manufacturers in the food, specialty chemicals, and biotechnology industries. Ross Enterprise includes formula-based production control and product-costing features that let process manufacturers go beyond standard costing approaches supported in many more-horizontal application suites, says Scot McLeod, the company's senior marketing vice president.
BWA Water Additives, a $125 million maker of water treatment products for industrial applications, recently chose the Ross Enterprise suite over SAP's All-in-One because employees found it easier to use and the product did a better job of helping BWA stage the movement of materials into and out of its plants. The Ross system aligned with BWA's business better than SAP's, which "was designed to fit a very horizontal set of businesses across many different spaces," says Paul Turgeon, BWA president and COO.
If anything, smaller vendors say, the increased focus on the SME space by SAP and Oracle — particularly their high-profile marketing — has helped all vendors in the market by getting smaller manufacturers to think seriously about updating their older systems.
"We see their advertising focusing on the value of solutions helping us," says John Hiraoka, senior vice president and chief marketing officer at Epicor. "If you want to call this a battle [with SAP and Oracle], it's one we were looking to fight." |