Last week NetSuite caught the Two-Tier ERP bug, this week it’s Epicor’s turn albeit with a different value proposition.
Two-Tier ERP, a concept that goes back at least 15 years has become a topic of interest to enterprise class vendors looking for ways to tap into the middle tier of customers that traditionally would have been out of reach to them. According to the press release which accompanied survey results from 1,600 respondents:
“It was very interesting to note that although 59% of the respondents have a single tier ERP strategy in place, only half of them have actually succeeded in getting that system implemented in the majority of their sites worldwide and over a third are actively considering a two-tier strategy to solve this problem,” said James Norwood, senior vice president, worldwide product marketing for Epicor.
I spoke with James Norwood on this topic. He said: “We’re sitting down with SAP consulting teams…to create some packaged adapters…so that it is not a custom gig each time…It’s good for customers because it reduces some of the more typical service elements.”
James then went on to contrast Epicor’s offering with that discussed in the analysis of NetSuite’s approach: “Where’s the skin in the game from the services perspective?” He then went on to say that having visited several of Epicor’s largest customers that they are looking to deploy new locations and properties in the cloud. These customers are looking for more vanilla style implementations using the equivalent of a shared services model. “The services, instead of being about the integration of two packages becomes more a managed or shared services thing.”
Epicor is trying to position itself as offering the best of both worlds. On the one hand it is packaging services so that those businesses wishing to retain on-premise solutions can get a fast start towards customizing yet do in such a way that the resulting services can be shared. On the other hand, it is saying to customers that if they choose, then they can still use Epicor solutions, retain benefits where customization isn’t needed but do so in cloud environments as a way of keeping deployed costs to a minimum.
Is this a viable strategy that will satisfy both Epicor’s market aspirations and buyer organization needs? “We are being approached some very large companies that traditionally would not have spoken to us. We’re fortunate because we can run Epicor 9 multi-tenant SaaS or on-premise so we have the means to provide choice. But I think it’s true to say the question comes whether some of the SI’s can get their head around a smaller gig for a greater volume.”
The SIs role in Two-Tier should not be under-estimated. SaaS has put pressure on both vendors and SIs. To date, the big SIs have not embraced SaaS as enthusiastically as the more nimble, new class of SI/VAR that is developing a ‘menu’ style approach to services that might include email and telephony. Epicor is pinning its hopes on the larger SIs that can reach the type of account they’d like to attract rather than those that are of the new class I am describing. That may work.
Epicor has around 12-18 months in which to make this strategy work. If it is able to convince customers AND SIs that it represents a viable alternative either to other existing on-premise and/or SaaS then it has a shot to occupy a slot where few other vendors are currently able to compete. As always with shifting sands, we need to monitor progress and revisit.
