Earlier today I saw Oracle crowing about getting a top slot in Gartner's Marketscope for financial applications. They weren't the only ones. SAP took a similar top slot. But then all the others Gartner looked at: Epicor, Lawson, Microsoft, Exact, Infor, Sage and Unit 4 Agresso scored 'positive.' Odd you might think. Even odder, the remark made about Oracle:
Oracle scored below average in the reference survey, and was slightly above the bottom-rated vendor. Of the products, EBS fared best, followed by JDE. However, PeopleSoft fared worst in the reference survey, with below-average scores in all categories, which were significantly below average in the service and support category, primarily with regard to ease of upgrade and ease of applying patches.
And this about Sage:
Sage scored very well in the reference survey, being the highest-rated vendor overall. Sage's scores were above average in all categories, but were significantly above average in service and support, which is indicative of the strength of its partner channel and the close relationship these partners build with their clients.
I won't go into the nitty gritty of the report which was otherwise a reasonable thumbnail of each vendor but I don't understand how after how many years? it would seem Oracle has managed to mess it up with PeopleSoft. I recall the days when founder Dave Duffield (now founder of Workday) would proudly shout customer satisfaction numbers at user conferences and appear personally mortified if they were off even a 100 basis points.
I'm nothing like as close to PeopleSoft as I should be but I can only imagine that the emergence of the more nimble on-demand Talent Management category, exemplified by the likes of Taleo and SuccessFactors, has deflected attention from HR management and PeopleSoft financials in its wake. But I could be wrong.
On Sage, I think the analyst is over emphasizing the role of the channel. The company has been working like crazy to ring fence its customers as the company watches license sales either flat line or fall. It emphasizes service at every turn as it tries to maintain or increase its support and maintenance charges for products that are beyond mature, they're ossifying. Following the last channel conference I heard rumblings about the lack of anything truly new to offer.
One bright area in the report was an attempt to cover the on-demand/saas financial market. Due to the way Gartner defines the market, it was inevitably restricted to the likes of Intacct, Workday, NetSuite and Twinfield with an honorable mention for CODA2go and a passing mention of Exact and SAP Business ByDesign. The glaring omission was Intuit which recently made some interesting moves into the open source space and which is moving more and more to morph over to the on-demand space. The impression I got though was that Gartner is trying to figure out how to cover this segment.
Color me cynical but right now, the likelihood of Gartner drawing any significant revenue from the on-demand players is almost nil. Several vendors have contacted me recently complaining at the $25,000 to $40,000 'entrance fee' which for many of these players is a tax too far. Some are withdrawing subscriptions altogether. This is a pity.
Nigel Rayner, the lead analyst for the report has been in and around financial applications for as many years as I can remember. He knows the on-prem market inside out and is an ace on business intelligence. I do sense though that on-demand is proving a tad more challenging. There wasn't a lot of 'bite' around his on-demand analysis. Perhaps he was putting a stake in the ground.
We're in the very early days of growth and while the companies he has covered are all doing well, it ignores many I know that are thriving, albeit in the SME market. FreshBooks counts more than 800,000 sign ups, Xero has 10,000 paying customers, 4,000 of which are in the UK where it had none two years ago and represents 1000% growth since March 2008. My old start up FreeAgent has just had a nice write up in the New York Times via GigaOM on its analysis of the freelance market in which it specializes. KashFlow has a potent one man marketing machine that is driving tremendous growth. Still others are emerging almost on a monthly basis. They're all playing in the SME space today where revenue is much harder to earn, but the vibrancy of this market should not be under estimated.
They won't be consulting with Gartner - at least not for the foreseeable future - but they should not be ignored. Instead, we should recognize they are attacking the SME incumbents indirectly while filling a much needed space just a little further up the food chain. This time next year, that landscape will look very different again.
Before closing out, I should throw a bone to my friend Vinnie. At the top of the report, Nigel says:
This is a mature and established market. The functionality of modules, such as GL and AP, has been developed during the past 25 years and will remain largely unchanged in the future. However, changes will come in the underlying technology as service-oriented architecture (SOA) becomes a reality and as new delivery models mature.
Another stick with which to beat up the vendors on pricing and maintenance?
Disclosure: CODA2go, Xero, FreeAgent and Twinfield have all been recent clients and sponsor my personal weblog.