PaaS ecosystems & ERP: The next (and hugely important) frontier [part 1]

PaaS ecosystems & ERP: The next (and hugely important) frontier [part 1]

Summary: ERP software and Platform-as-a-Service (PaaS) are on a collision course. This is part one a 5-piece series on the evolving ERP/PaaS space. Who's ecosystem will reign supreme?

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Part 1

Many, many years ago, on a very snowy day in New York City, I sat in on a Merrill Lynch investor conference. Marc Benioff of salesforce.com was one of the technology CEO speakers that day. As Marc spoke, it dawned on me that salesforce.com was not going to be a giant application software vendor. Instead, salesforce.com was angling to become a platform player first and foremost.

In that moment, I realized a fundamental change was occurring in the application software marketplace. But, I wondered if other vendors would also see this and act in a manner similar to salesforce.com? The uptake of platform technology has been slow among application software vendors until recent years. There is currently an arms race underway inside software companies today with each trying to build its own cloud platform stack. Unfortunately, too many firms may be too late in the development of their platform technology and worse, may have missed the boat altogether in developing a vibrant platform ecosystem.

Within the ERP space, platform-as-a-service (PaaS) technology is something that salesforce.com and NetSuite have developed, promoted and used to attract developers. The force.com architecture of salesforce.com may currently be one of the largest business PaaS ecosystems today.

Over the last many months I have quizzed a number of ERP, HR and other vendors regarding their platform-as-a-service offerings. In summary, what I have learned is that:

  • there are a number of application software products that utilize Microsoft technology as its basis for its original (SOA and then cloud) platform
  • some vendors believe that continued enhancement of these SOA platforms may require rewriting much of the their solutions
  • vendor after vendor are rolling their own PaaS environment utilizing combinations of open source and commercial software technologies from both large and small providers
  • vendors and vendor management see the development of a PaaS as a technical challenge that will deliver benefits for their customers. They are not fully aware of nor understand the ramifications that a PaaS ecosystem will bring to their firm and their customer base

Phil Simon's

Phil Simon

A few days ago, I sat down with Phil Simon. Phil has a new book out called, "The Age of the Platform". This book focuses on four major technology platforms: Apple, Amazon, Google and Facebook. In the hour and a half Phil and I spent at lunch, I was astounded at how deeply each of us understood the platform space but also recognized how each of us has come to different understandings around platforms based on our coverage areas. I care mostly about how platforms will be developed within the application software space while Phil's closes the gap with many more examples in the consumer technology space.

That lunch was a particularly important one as the lessons that have developed in the platforms of Phil's big four (Amazon, Google, Facebook and Apple) will doubtlessly come back to apply to PaaS developers in the ERP and other application spaces. And possibly, the most important lesson that warrants focus today is this: there will not be an infinite number of successful platform ecosystems and many of the platform development efforts of ERP vendors today will not deliver big benefits.

Next Post: State of the ERP PaaS and PaaS Ecosystems

Topics: Enterprise Software, Cloud

About

Brian is currently CEO of TechVentive, a strategy consultancy serving technology providers and other firms. He is also a research analyst with Vital Analysis.

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