ERP Software

ERP Software Companies

There are many ERP software companies vying for market share in this global market. These vendors understand that there is a great potential for profits in this market segment. Companies are willing to pay plenty of money for ERP systems, because the companies can realize a significant return on their investment. Implementation, upgrade and ongoing maintenance costs can all be earned by the ERP vendor if chosen as the solution for a company. Once locked into an ERP solution, it is extremely complicated and costly to migrate to another solution. For the stated reason, landing customers would almost guarantee the ERP software companies consistent revenue for many years.

Three companies dominate the large enterprise business sector, while a slew of other ERP vendors try to find their niche in the small and medium sized business (SMB) market. SAP, Oracle and Microsoft are the three large ERP software companies that combine to own the majority of the ERP market share. SAP leads the way with over 100,000 installations in over 120 countries across the globe. Oracle is second in market share and Microsoft third.

In recent years, the big companies have tried to shift some of their energies to small and medium sized businesses to increase their install base. Previously, the cost of implementation and maintenance was too great to be of benefit to companies below the enterprise level. These companies have tried to expand their offerings to include stripped down software packages that could provide a return on investment to SMBs. These packages are not as robust as the full blow ERP solution, but can still provide SMBs with a competitive advantage in their respective market. Also, it is easier to up-sell additional components if the base ERP system is already installed.

Some other ERP software companies that make up the remaining 30% are Epicor, Sage, and Syspro, but there are many others. These smaller companies know that they can’t compete with the three large ERP vendors in the enterprise arena, but they try to find a niche in the market. By offering tailored made solutions to certain industries or solutions at a low price point, these smaller ERP software companies have been able to nab their small share of the ERP market. These companies do not have the resources or cash to offer solutions as robust as SAP, Oracle and Microsoft, but they often are more agile and are able to quickly adapt to the customers’ needs.

The ERP market is big enough to sustain the profitability of many ERP software companies, but there will always be a few whales and many minnows. This is the nature of many industries, but the small players will always do their best to compete with the big boys.

Written by :

Amy Cruz