US ERP vendor JD Edwards has decided to leave the ASP delivery of its products to partners, but local officials are tight-lipped as to whether ASPs in this country are going to gain any new opportunities as a result.
While several elements of Enterprise Resource Planning (ERP) systems are outsourced through the ASP model, outsourcing the whole kit-and-caboodle has often been seen as a daunting task considering the sheer size and complexity of the software, as well as the sensitivity of the data it processes.
But as ERP software becomes Internet-enabled and businesses become more comfortable with outsourcing on the whole, market movements in the US suggest there may be opportunities for ASPs to begin taking these systems to market over networks.
The JD Edwards announcement highlights the potential of using partners, freeing up the vendor's resources to concentrate on developing improvements in the software. JD Edwards' Global ASP Solutions division currently has 20 partners worldwide in a variety of industry sectors, supporting over 100 customers.
"Since 1997 JD Edwards has been committed to a successful ASP partner channel and the ASP business philosophy," said Dee Kellogg, recently appointed director of Global ASP Solutions for JD Edwards. "We were early to recognise this market opportunity, and have built a proven strategy which entails a global network of business partners that offers our customers unmatched strength in dynamic ASP business solutions. We will continue to expand our ASP Channel Partner Program into new vertical and geographic territories globally."
While JD Edwards' head office considers this a global announcement, local officials were hesitant to comment on the company's ASP strategy, other than to say it may involve the use of partners and will be announced next quarter.
"Locally, we're working on our own strategy," said Glenn Wright, director of business development, marketing and sales at JD Edwards Australia. "We are developing our own models here, very much in line with the experiences and successes of our worldwide operations."
A study by Gartner analysts Robert Anderson and Timothy Tow suggests JD Edwards' decision to use ASP partners is a "logical response to market paradigms". Whereas many ERP vendors began with a hybrid direct/channel approach to delivering ASP solutions due to anxiety over losing contact with customers, these vendors are becoming more comfortable with channel partnerships. According to the Gartner analysts, ASP partners are becoming more confident with the systems through certification processes, and vendors are seeing the need to return to their core competency of developing software. As a result, Gartner expects more ERP vendors to follow JD Edwards' direction.