Interesting perspective. Some of it I agree with, some I do not.

For example, the TomorrowNow being some SAP "conspiracy" to point it at the Oracle base seems silly. Granted, SAP did an "Ellison" in the cut throat arena, but it was a shrewd business move.

The TomorrowNow business model was **ALREADY** pointed at Oracle who has long been known to "give away" the software, and once their customers finally stabilize (1 or 2 years later) take them to the cleaners on support and maintenance. After all, I read somewhere that some 80+% of Oracle APPs revenue is derived from that support and not from licenses.

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Having said all of that, much of your article I do agree with, but with the caveat that many of the upgrade / code "rewrites" are a thing of the past.

Most of the major vendors make their software backward compatible so that it is more testing and slight adjustments to SOME of the programs or enhancements during an upgrade. Nearly all of the data structures and much of the proprietary coding languages remain in tact. There isn't much of the wholesale re-writing anything if the initial implementer / vendor did their job correctly.

In fairness and in the spirit of full disclosure, I am an SAP consultant and editor for www.r3now.com. I focus on how businesses can be sure they are getting what they pay for when they do an ERP implementation.

Bill

Great article. As a customer of SAP I am experiencing what you are saying on a daily basis first hand. Even with SAP's new "open" architecture a "technical upgrade" is still going to cost a truck load of money to perform.

To fully gain the benefit of the maintenance fee the organisation needs to commit to upgrading at least annually, and maintaining skills and team to do so.

Often, these upgrades bring no inherent business benefits, they are merely "hygene".

If you are unwilling to commit to this regimen, you might as well negotiate for source code up front, and turn off the maintenance fees after 2 years, and rip and replace (relicense or swap vendors) when business benefit dictates

Certainly an interesting but kind of slanted perspective. What does the author prefer that vendors do, not invest in this "insanely complex" set of tools that needs to constantly evolve.

The problem as always is expectations. Adopting ERP, or call it anything you want - anything capable of running a large, multi, multi, multi organization - has to be complex, and of course all businesses and the technology are constantly changing and evolving. So, clear strategy in terms of how to leverage a platform, how much it will cost to remain current, or a conscious decision not to do so are really needed. But conspiracy? I doubt it.

Chris,

Your frustration mirrors that of many readers no doubt, as I've had the conversation with CIOs, CFOs, and CEOs over the years.

Imagine being the CEO/CFO of a company in an industry with profit margins in the single digits, or a company losing money in a hyper competitive industry, yet being forced to pay millions to very large companies with 30% margins. Then combine the level of manipulation and control that key vendors have in computing that simply isn't possible in any other environment.

I think your focus on fear is valid(remember the industry grew up on FUD), but fear has turned to anger in a fairly large portion of the market.

The question is whether that anger will translate into action of the type necessary for new entrants, new cultures, and new business models. To date very few customers have been willing to accept any risk at all with new entrants who face a daunting task given the barriers in the market you describe, and we all know about, to include relationships with media and other chief influencers.

There is a better way, and I personally believe that all of enterprise software would be better off with some real competition and a more progressive service oriented culture. It doesn't happen however without substantial support in this type of environment.

Mark Montgomery
Founder & CEO
Kyield