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e-Xpertise in Industry Issue #29
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February 2007

In this issue...

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Quote for Today

It is not only what we do, but also what we do not do, for which we are accountable. Moliere.

Feature Article: Enterprise Applications review

2006 saw a great deal more consolidation in the Enterprise Applications market, making for impressive headline growths for Infor (an estimated annual growth of 160%) and Oracle's Applications division (about 65% growth in annual license revenue). However, much of this perceived growth was fuelled by acquisitions. Taking into account Oracle's acquisitions of Peoplesoft and Siebel, its proforma license revenue growth is closer to 11%. However, even accounting for acquisition-related growth, there is still significant organic growth - for example, Infor claims to have won 1,000 new customers in the past year.

Cambashi's tracked group of the top Enterprise Applications vendors grew by around 12% during 2006 to more than $21bn. For global companies, the decline of the $ relative to the € during 2006 makes a $-based growth figure a slightly flattering view of underlying business performance. Of this group, SAP accounted for nearly $12bn, also growing by about 12%, thereby maintaining its share of the market. However, in its heartland of Europe, SAP grew slower than the group of tracked companies for the first time in a number of years. SAP grew 4% to €4.7bn, while the tracked companies - excluding SAP - grew more than 7%. Between 2001 and 2005, only in one quarter had SAP grown slower than its group of peers in Europe, whereas in 2006 only in Q4 did SAP outgrow the market - see figure 1.

The outlook for 2007 depends very heavily on economic conditions in Europe and the US, but we expect a number of trends to continue. SAP and Oracle will continue to look for a greater share of customers' IT budgets by expanding their range of offerings and by selling additional functionality to their user base. Much of their new-name business is likely to come from sales to mid-sized companies - another of their focus areas. The mid-market vendors will continue to expand into the niche industry sectors where they have an advantage over both the large vendors and the small vendors. The mid-market leader, Infor, will likely continue its acquisition strategy, which also enables it to compete for more of its customers' IT budgets.

One of the strategies for attracting mid-market business is the concept of "software as a service" or SaaS. Although revenues are still small, most of the vendors have a SaaS offering and specialist vendors, like salesforce.com, are growing market share. A recent survey by Merrill Lynch found that many CIOs intend to roll out Service Oriented Architecture (SOA) technologies in 2007, which may mean that companies are intending to upgrade their ERP platform technologies to make them SOA compatible.

Most of the ERP vendors have a stated aim of increasing sales in the APAC region, especially the fast-growing market of China. However, this will need to be a long-term strategy requiring a good deal of time spent nurturing relationships with local resellers and partners. A more immediate return could result from addressing the fast-growing areas in the new EU states - particularly Poland, Czech Republic and Hungary.

Some vendors believe there could be significant growth from companies that upgraded systems for Y2K seven years ago and are now ready to upgrade their investment in ERP technology. Added to other drivers for ERP investment, such as globalisation, compliance reporting, and control of partner collaboration, it is unlikely that the ERP growth engine has run out of steam.

Dan Roberts

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Hot Topic: Singing a Green Song

Most IT vendors have been talking about being green for a long while and some have actually been doing something about it - albeit rather quietly. The time for hiding one's light under a bushel is definitely over and vendors are now beginning to spend real marketing money on establishing their green credentials.

The most recent surge in energy prices has certainly focused the minds of vendors on environmental issues, such as driving down the energy consumption of IT products. What started a long time ago, primarily as the means to extend battery life, has now become a key metric of competitive advantage when so much of the data centre cost is dictated by the energy bill. This has two components of course - the cost of running the systems and the cost of all the cooling plant that is required to dispose of all the unwanted heat, which is the unavoidable by-product.

It is perfectly reasonable that the IT industry adopts those aspects of the green agenda that have the greatest resonance and also payback for the customer and will thus hopefully lead to competitive advantage for the vendor. It is a simply a return on investment calculation. This does mean that when you consider an IT or an electronics company holistically, there is usually a great deal that still needs to be done before they truly represent a sustainable business model. Initiatives like eliminating excessive packaging and more genuine efforts to recycle and re-use materials spring to mind immediately.

And the stakes are getting higher all the time. More aggressive lobbyists and governments are asking for much higher duty or taxes to be levied on disposable products like cameras. It is only a matter of time before this becomes the norm rather than a fringe activity.

Most large businesses now have a top level executive dedicated to Corporate Responsibility, whose span of control and influence in such matters as procurement policy is only going to grow. The time to make sure the sales force can sing this song has definitely arrived.

Bob Brown

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Book Review: Persuasive Business Proposals by Tom Sant
ISBN 0-8144-7153-6, AMACOM 2004, $17.95

This book has four sections: an introduction; a discussion of persuasion; the proposal writing process; and the style and language to use in the actual writing of the proposal.

The introduction explains the simple idea at the heart of this book. Tom Sant recommends writing proposals that tell the customer what the supplier's proposal will do for them, in language that is easy for them to understand. He points out that a high proportion of proposals are written simply as a statement of what the supplier will do. This is of course easy for the writer.

The persuasion section explains how proposal writers need to put themselves in the customer's shoes. When writing they should consider the proposal evaluation process, and write to meet the evaluation requirements rather than internal concerns of the supplier.

Using examples, both good and bad, the next section suggests a proposal writing process that will put the customer first. It deals with variants such as responding to a Request For Proposal (RFP); dealing with grant proposals; and proposing by letter. It also considers how to deal with proposing to a customer with a negative perception of the supplier for some reason. It closes with a description of success metrics for proposals

The brief section on writing style covers issues such as word choice, sentence structure and how to keep the proposal short and to the point.

The thesis of the book is hardly original. However, when we write business proposals, most would agree that we often stray from customer centricity.

I found the book both reinforced my belief in writing for the reader and made me realize how often I don't. I think reading and following this book's propositions will help proposal writers at all levels to write a higher proportion of winning proposals.

Mike Evans

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Noticeboard

Cambashi Training Practice

In most companies, professional development and business success go hand in hand. For 2007, Cambashi has created a business practice focused on Training and Industry Readiness. The aim of the practice is to deliver a full range of professional development and training services for our clients who work with manufacturing and related industries.

For more information, click here

Cambashi's e-Xpertise for Industry - new for IT users

We are launching a new ezine for users of IT in Industry. It will complement the current ezine for sales and marketing of IT to Industry, which is now in its 8th year. As always, it will aim to inform with an independent viewpoint free of advertising material.

The new ezine will have a business focus. There will be a mix of articles on new business initiatives, new technologies, also case studies and feedback from users of IT. It will be edited by John Dwyer whose many accolades include Business and Professional Columnist of the Year given by the Periodical Publishers' Association. Our authors will be analysing the news, not just reporting it. We will also encourage participation from our readers.

The new ezine will be issued 3-4 times a year and is only available via opt-in.

To subscribe, send an email with the word "subscribe" in the subject line to expertise@cambashi.com. An email address is sufficient, but information on your particular area of interest will help us to tailor the content to our readers. The information you supply will be used only by Cambashi. For more details on our privacy policy, see our privacy policy.

Events
WIN 2007 (MWSM): 24-28 Feb 2007, Istanbul, Turkey
WIN 2007 (AEH): 8-11 Mar 2007, Istanbul, Turkey
GITA: (Geospatial Information & Technology Association), 4-7 Mar 2007, San Antonio, USA
CeBIT: 15-21 Mar 2007, Hanover, Germany - billed as the world's leading trade show for solutions, products and services from all areas of IT and telecommunications.
SITI 2007: 27-29 Mar 2007, Madrid, Spain
Softworld Supply Chain: 28-29 Mar 2007, Birmingham, UK
COFES: 12-15 Apr 2007, Scottsdale, USA
DATE: 16-20 Apr 2007, Nice, France
Hannover Fair: 16-20 Apr 2007, Hannover, Germany

A full list of industry events can be found at IT industry events on the Cambashi website

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