What software you need to sell Oracle has some features SAP lacks, but with its acquisition of Marketmax, SAS Institute says it can integrate its business intelligence features with major ERP packages. Find out what’s in store for you By Grant Buckler Retailers have become popular targets for software developers lately.
Major enterprise resource planning (ERP) vendors SAP AG and Oracle Corp. have both made several acquisitions to bolster their positions in the retail sector. They’ve also hired “armies of merchant-savvy leaders to underpin their industry position,” notes analyst Scott Langdoc in a recent report from International Data Corp.’s Global Retail Insights unit, and “their portfolios now span from POS to home office to global supply chain management. And retailers are paying increasing attention.”
Business-intelligence and analytics vendors are also interested in retail, with SAS Institute Inc. in particular reinforcing its retail offerings. Having first tried business intelligence in the financial area, says Janet Suleski, research director, retail, at AMR Research in Boston, retailers are now seeing its potential in other parts of their operations. Wider BI deployment in retail companies means ease of use is becoming increasingly important, Suleski adds.
While retail software still falls into two fairly distinct groups — ERP and BI — the line between those categories is blurring as vendors attempt to improve integration of the different functions. In particular, Suleski says, Oracle and SAP have used acquisitions to integrate business intelligence capabilities with their ERP offerings.
The rash of acquisitions has reshaped the industry, says George Goodall, senior research analyst at Info-Tech Research Group in London, Ont. Once made up of small, best-of-breed vendors, it is now dominated by the large enterprise software firms that snapped up many of those smaller players. Here’s a quick survey.
? Epicor Irvine, Calif.-based Epicor Software Corp. supplies enterprise software to several vertical markets including retail. With its 2005 acquisition of CRS Retail Systems Inc., and February’s takeover of NSB Retail Systems PLC, Suleski says Epicor now “can serve the market at many different levels.” The NSB software is a more robust offering, she says, while the CRS product is aimed at the mid-market.
? IBM With the 2007 acquisition of Canadian business-intelligence vendor Cognos Inc., IBM became a real contender in the BI space. Yet the company has not emphasized the retail vertical as much as it might, Suleski says. IBM offers some retail “blueprints” for the Cognos 8 Planning tool. It’s a strong platform that some retailers are using today, says Suleski, but IBM could be making more noise about specific offerings for retail customers.
? JDA Software Group As SAP and Oracle snapped up smaller companies over the past few years, Scottsdale, Ariz.-based JDA Software Group was one of the few with a retail software focus to remain independent. Its 2006 acquisition of Manugistics, a supply-chain software vendor, strengthened its hand, Goodall says, and the company has a strong retail focus. “My primary concern with JDA,” Goodall concludes, “is just that they’re not Oracle or SAP.”
? Manhattan Associates Langdoc’s 2007 report on enterprise retail suites singles out Manhattan Associates, an Atlanta-based supply chain software vendor, alongside SAS for their expanding retail analytic capabilities. Goodall also names Manhattan as a notable player, though he says the company’s focus will always be around supply chain execution.
? Oracle Through deals such as its 2005 purchases of ProfitLogic, Inc., and Retek Inc., Oracle has acquired “a lot of best-of-breed functionality,” Goodall says, but “the issue for Oracle — and this is always the issue for Oracle applications — is really how those things get integrated into a single retail platform.” Because of the number of acquisitions the company has made, “the integration still isn’t nearly as slick or as smooth as I would hope,” he concludes — and Suleski adds that Oracle’s resources have been divided between integrating acquired products and enhancing its software.
Goodall adds that customers of some of the companies Oracle acquired had chosen smaller independent suppliers deliberately because they didn’t want to be Oracle shops. “This has been very much a source of tension,” he says. In his November 2007 report on enterprise retail suites, though, IDC’s Langdoc says Oracle is winning in enterprise retail software, though he adds that its lead is not insurmountable.
Oracle also has established “some thought leadership in the retail space around customer-centric retailing,” Suleski says.
? SAP Already a leader in ERP, SAP vaulted into the front ranks in business intelligence with last year’s purchase of Business Objects. Analysts say SAP’s strength in ERP is integration. “SAP is for the most part an organically developed product,” Goodall says. Suleski calls it “a well integrated set of solutions.”
Richard Murray, vice-president of strategy and solutions marketing for trading industries at SAP in Dallas, says that’s the result of a strategy that relies more on internal development than on acquisitions. When a vendor does a lot of acquisitions, he says, “you look like you cover more as a result, but then you become fragmented.”
Goodall says Oracle’s software portfolio covers some niches SAP’s doesn’t, such as advanced demand analysis and margin optimization. Murray admits to a few gaps, but says “we believe our solution addresses 90 to 95 per cent of what the market needs.” SAP has a road map for filling in the remaining gaps, he says.
Suleski says SAP’s software is perceived as monolithic and difficult to implement. Murray replies that this perception has lessened in recent years, partly because the company is moving from early retail implementations with large customers like Wal-Mart to an emphasis on mid-range buyers.
? SAS Goodall describes SAS Institute as the number-two contender in business intelligence, behind Business Objects (now part of SAP).
Its software’s “ability to integrate extremely large data sets that would blow up other sorts of systems” stands SAS in good stead in the retail industry, which has masses of data to deal with, Goodall says.
SAS acquired Marketmax, Inc., a maker of retail planning and merchandise intelligence software. Combining Marketmax’s planning products with its own analytics “allowed us to bring fully packaged, whole solutions to the market very quickly,” says Michael Turney, manager of strategy and market development for retail solutions at SAS. Since its strength is in analytics rather than ERP, SAS also emphasized its software’s ability to integrate with ERP products from SAP, Oracle and others. “We truly integrate with any environment and stick that data into a SAS platform,” Turney claims.
