Software Suites are the Logical Conclusion

CIOs don’t want long list of solutions with customized integration. They can manage a comprehensive suite much more easily. The winners in the coming shakeout will be vendors with broad suites tailored to specific vertical markets.

Let’s take a brief look at some of the point solution markets:

CRM – Siebel did very well for a while. When their opportunities diminished over time, they were acquired by Oracle. Salesforce.com is enjoying a great ride. However, their growth rate is slowing and they need to augment their offerings. They are choosing to do that with Force.com and partners developing applications that integrate. Most believe they will be acquired by a major ERP provider.

SCM – i2 Technologies is the latest poster child. JDA is acquiring i2 to broaden its offerings. Many other SCM pioneers have been swallowed up by suite vendors.

HCM – Peoplesoft recognized long ago that it needed to expand beyond a limited horizontal offering. It bought JD Edwards, a more complete ERP product. Dave Duffield is starting again with Workday, but will go beyond HCM to add some ERP functionality right off the bat.

MES – The Manufacturing Execution Systems space is highly fragmented with many smaller players and various niches. SAP, noting the need to provide its own shop floor functionality, recently acquired Visiprise. I fully expect Oracle to follow suit.

Quality – This area has been more on the fringes of the manufacturing space. Some vendors have done well with standalone solutions. They have partnered to a degree with various ERP providers. Now, though, there is pressure to consolidate quality functionality directly into the MES and ERP solutions.

It’s obviously difficult to be all things to all people. I argue that it is also difficult to survive in enterprise application software by being just “something” to all people. The winning combination is to serve all the needs of a focused group of customers.

At Plexus, for instance, we focus on discrete manufacturers. We provide virtually everything needed to run a global manufacturing enterprise. We don’t have features for retailers, banks, insurance companies, accounting firms, etc. Our single-source, multi-tenant model allows us to rapidly build capabilities into the core product that appeal to virtually all of our customers.

We combine ERP, MES, SCM, Quality, HCM and some CRM into one, consistent, powerful solution. Some of our software areas don’t compete as well with standalone solutions in some markets such as CRM, but they have more than enough capability for most manufacturers. Other areas such as MES, SCM and Quality stand out as best of breed even as standalone solutions. They are unbeatable when implemented as part of the whole.

It seems clear to me that suites are the logical conclusion to enterprise application software evolution. Vendors should be challenged to serve all the needs of a focused group of customers.

Long-term, SFDC, Netsuite and others cannot exist alone without dramatically broadening their footprint.

Mark Symonds, CEO of Plexus Systems, Inc., is an operations expert with 25 years of experience. His blog is about the convergence of ERP and the on-demand (software as a service) delivery model, and its impact on manufacturers.