From a series of articles on the leaders in the business applications software field originally published in Computer Business Review, a sister publication.
While ‘big is best’ may be the mantra for the enterprise business applications leaders the diverse nature of the market has also spawned a multitude of smaller, prosperous applications providers. Although the combined revenues of the bottom half of the top 20 applications providers was only $1,300m, a quarter of that earned by the top five combined, the average growth rate was still 25%. Most of these companies fit into one of three key categories – geographical specialists, application function/vertical market specialists and platform specialists. And while few analysts believe that one of these players will emerge to be the new business applications market leader, there is plenty of potential for growth. Virtually every country in Europe has at least one strong local market business applications provider and, defying prediction, a number are also starting to find success on the world stage. In addition, North America also has a few geographic specialists which are now trying to go global. Although the opportunities for local business application suppliers are considerable, ‘best of breed’ niche function suppliers have mostly struggled over the past two years in the face of competition from the large, integrated business applications providers.
Market starting to swing in their favor
But there are suggestions that the market is starting to swing in their favor, with users demanding ever increasing, application and industry specific function. Many companies have their roots in the financial sector, including Hyperion – number 11 in the top 20 with revenues up 26% at $172.8m, Coda, Computron and Kewill Systems of the UK, the US-headquartered Dodge Group and the NT/Unix financial specialist Systems Union. Manufacturing specialists include Ross Systems – number 20 in the top 20 with revenues of $68.1m, Tetra – the Unix and NT supplier with revenues of $28.4m, Cincom which claims worldwide revenues of $58m in the ERP, PivotPoint and AspenTech of the US and Strategic Systems International of the UK. Due to the vagaries of employment laws across Europe, there are also lots of small human resource specialists selling strictly on a country basis. The continuing strength of the mainframe and the AS/400, and the growing acceptance of the PC as a business critical application, means that there are also still a number of companies winning deals with primarily single platform offerings. Most of these companies are, however, trying to branch out beyond their home- base. Lawson Software, for example, started out as an AS/400 only provider but now claims that less than 40% of its revenues are AS/400 based, with the rest coming from open systems. The company which is heavily pushing Web-deployable applications, posted revenues of $123m last year, earning it the 14th spot in the top 20. Infinium Software, formerly Software 2000, has also moved beyond its AS/400 core, launching on the NT operating system. With revenues of $72m in 1996, the company was recently ranked in the top 20 of Business Week’s top 100 fastest growing companies and is currently number 19 in the top 20.