Archive for February, 2010
SAP Hears Good Things in The UK
News about SAP implementations in the UK has been coming steadily, and for the most part it has been promising.
Of note, Premier Foods implemented an SAP system in 2006, and is reportedly pleased with how the platform is helping them improve processes. Premier Foods’ goal was to seamlessly integrate the front and back offices, and almost four years into their implementation SAP is working well to that end. From now until 2012, Premier Foods is planning to use the solution to streamline and cut costs for back office operations. Premier, which produces Hovis bread and Mr. Kipling apple pies (among other food items), stated they already had a pretty lean back office, and that with SAP they’re hoping to reduce the number of duplications.
The other SAP-UK news item from this week describes an SAP partner implementing SAP financials for United Stationers, to help manage distribution and product lists. All in all, the news is not much for a company like SAP—a software giant with many implementations globally, but it is a good sign. Given the recent departure of Leo Apotheker and the company’s subsequent return to the co-CEO model—and of course the barrage of bad press they received for steep prices and slow implementations—it’s definitely good to hear customers singing SAP’s praises.
When it comes to a company of SAP’s size and stature, making guesses as to the effect of certain problems is tricky. SAP’s products may seem outdated, but to see a company satisfied with a 6-year deployment process does suggest that SAP isn’t doing everything wrong.
No commentsNetSuite Poaches from SAP, Boast Big Q4 Earnings
Late last week, NetSuite announced their fourth quarter earnings, and their overall success in 2009 is undoubtedly a harbinger of widespread SaaS ERP uptake within the next few years. And if those numbers weren’t enough, they also announced that RedBuilt LLC switched to their product from SAP—NetSuite has successfully poached SAP customers before, but RedBuilt is the largest one yet.
NetSuite’s annual revenue was up 9% and Q4 revenues were at a record $43 million. Their sales increased as on-premise vendors experienced downward sales trends. SAP’s SaaS sales went up marginally, but their overall software revenues were down 27%, and their biggest boost came from the increase in support sales—typically SAP’s biggest source of income—which increased 11%. Oracle’s numbers fall somewhere in between.
So SaaS sales are on the up and up, but on-premise ERP products are not slipping entirely into obscurity. SAP’s Business Objects line does very well, despite the heavy fire they’ve endured for less effective cloud offerings. Still, RedBuilt’s switch to NetSuite is a good sign for SaaS ERP delivery. RedBuilt is an innovator and supplier of engineered wood products for the commercial and multi-family construction industry, and they’ve switched to NetSuite for managing their corporate offices and four production plants, and perhaps most importantly, the NetSuite deployment means RedBuilt no longer has to pay the $275,000 annual salary costs for SAP and database administration.
NetSuite certainly offers a very complete SaaS ERP package, as do other companies, but the SaaS deployment’s biggest coup so far is its cost, which explains why on-premise ERP is not extinct, and will probably take longer than expected to die out. When SaaS ERP packages are more extensive, then we’ll really begin to see some change.
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