Is ERP "Grossly Overpriced"?

3 comments

Instead of creating debate, I thought I would share some insight from a recent interaction among myself and some of my Enterprise Irregular friends.  This is large of a much longer discussion but thought you would enjoy these responses most…

Response 1: “…SAP is grossly overpriced?  SAP knows it, you know, they know we know it. It’s not that they don’t have the answer. They don’t like the answer… “

Response 2 (my response): “…I’m in the process of selling a house.  I would sure love to give my buyer a deal but to be honest I would much prefer to make as much money as possible on the sale.  Try for once putting yourself in the seat of the seller!”

Response 3: “  Selling, Jason? That’s so Web 1.0. What you want to do is lease your house to someone on a long term basis, charging them at the beginning of each year.

Anyone interested in a HaaS (housing-as-a-service) offering near Boston, Massachusetts?  I am willing to offer an ERP-like discount (70%) and throw platinum support (my John Deere) at no cost.

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  • http://www.businessone.co.za Cornel Schoeman

    Companies that have acquired an implemented a ERP solution knows what it has cost them not to have one. Their ROI was most definitely well defined before the purchase. Sometimes it is not only the cost of erp, but the return on the investment that should be considered in the total cost of ownership.

  • http://blogs.zdnet.com/SAAS/ Phil Wainewright

    I’ve warned about these ‘Same old’ Housing-as-a-Service offerings before … it doesn’t work with conventional housing – you have to rebuild from the ground up for multitenancy.

  • http://www.hrmdirect.com/hrm2/blog/ Colin Kingsbury

    I think the current equilibrium in ERP will continue for a long time to come.

    1. There aren’t enough vendors to cause real price competition. Economists have an expression that goes, “six [companies in a market] are many and four are few.”

    2. Clients are (understandably) reluctant to take chances, so in order to break something new you’d need to lower costs dramatically–perhaps more than is economically feasible.

    3. A huge portion of the cost is in services, which to some extent will cost the same whether you buy from Initech, Initrode, or IniSaaS.

    4. There’s nothing magical about SaaS. SaaS isn’t just about infrastructure and low-level tenancy management. It’s also largely about the application design on a user experience level. Salesforce could have done very well against Siebel just by selling licenses to a very clean and easy-to-get-up-and-running web-based CRM package. However, it wouldn’t have had one tenth the marketing juice of “No Software.” SaaS creates potent long-term efficiencies for vendors, but I’m not sure this is applicable in a market like ERP where deep customization is, or should be, the order of the day.

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