Cloud ERP in 2012: The Competitive Landscape

Clearly 2012 was a big year for Cloud ERP. More providers than ever were declaring their commitment to the platform, all while sending some mixed signals as to their true intentions.

For a company built on the cloud from the ground up -- strange as that might sound, it’s the truth -- watching the competition struggle with adapting to the new business model all while trying to maintain their legacy business makes for an interesting read.

What follows is an examination of the competitive landscape for Cloud ERP in 2012.


In many ways, Microsoft has a well-earned reputation as a fast follower, but its Cloud ERP progress has been anything but.

At its 2011 Convergence Conference, Microsoft boldly laid out its plan to release the next generation of Dynamics ERP on Azure, starting with NAV. Then last March, Microsoft pledged NAV would go into Beta and arrive by year’s end along with GP 13. Only that didn’t happen.

Then, in December, Microsoft further delayed its Cloud ERP plans deeper into 2013, telling

An anticipated Microsoft Azure public-cloud deployment option for Dynamics NAV and Dynamics GP ERP apps has been pushed back into the second half of next year.


Meanwhile SAP’s long and winding road toward Cloud-based ERP continued its meandering path. Walldorf spent the last year firmly focused on HANA and mobile, leading some (okay, me in another role, but I heard it from others too) to wonder if SAP was leaving ERP behind. Certainly, it plans on leaving much of its new ERP business to the partner channel. Not necessarily Cloud ERP, of course.

Business ByDesign remains SAP’s Cloud ERP offering, but where once the company trumpeted its plans and what success it had with the product, SAP is now playing coy with customer numbers for Business ByDesign. It’s stuck on 1,000. From’s SAP Watch Blog:

We’re still referring to the number that we provided last November, more than one thousand users,” according to Astrid Poelchen, director of SAP product communications.

Meanwhile, SAP’s big cloud splash was the acquisition of SuccessFactors and the outspoken CEO that went along with it. The man empowered to lead SAP’s cloud initiatives moving forward, wasn’t too impressed with the way Business ByDesign has been brought to market.

“It hasn’t been marketed right, it hasn’t been positioned right or explained right and people haven’t been trained right,” Lars Dalgaard said at Sapphire, SAP’s user conference. “There isn’t much I can say that’s been done right.”

SAP did manage to release Financials OnDemand, accounting, general ledger and other functionality pulled from Business ByDesign and offered as a separate module, but that has the potential to simply further confuse customers evaluating SAP’s growing number of ERP products.


With its roots in HR software, Workday ventured into financials in 2012, with Workday 16 and Workday 17, no doubt a partial response to Oracle, SAP and IBM pushing into its cloud HR turf with the acquisitions of Taleo, SuccesFactors and Kenexa respectively.

The push was also likely fueled by Workday’s IPO. And while, analysts have been generally impressed with the product, Workday’s customer base sits at just 325 major customers, according to the IPO filing, making BusinessByDesign’s 1,000 figure seem like a wild success.

Sage, Epicor, SAP Business All in One

There are, of course, many flavors of cloud and plenty of providers more than willing to take their on-premise software, throw it up on Amazon and call it Cloud ERP. We’ve written about the problems of the fake cloud here in this space before.

SearchManufacturingERP does a nice job of explaining the pitfalls of public Coud ERP in the context of Sage, Epicor and SAP’s Business All in One products being put in the cloud last year.

As Bob Parker, group vice president at IDG Manufacturing Insights, said in the story:

“I would greatly question the performance of putting the database tier in the cloud. SAP Business All-in-One] may be certified, but you would be certifiable if you do it.” In the typical, three-tier SAP deployment, Parker said, the middle tier is where business logic resides, database queries come through, and transactions are processed. This tier must communicate with the database tier. “There’s probably considerable latency running that [database] on the cloud,” he said. “You’re going to take all that internal traffic between your on-premise middle tier and your Amazon database tier.”

Epicor and Sage, which are both moving their products to Windows Azure, have a legacy of .NET and SQL Server to thank. However the transition from on-premise to the cloud is not an easy one, requiring code modification.

Then there’s the SQL Azure database. Again, from

The required SQL Azure database is also a potential trouble spot. It’s precisely the challenge Epicor has faced, according to R "Ray" Wang, CEO and principal analyst of Constellation Research Inc. “They’ve had a hard time getting SQL Azure to work,” he said.

The coming year promises more advancement, hype and likely a missed goal or two, but it’s clear which direction the market is moving.

-, Content Director/Editor at NetSuite

comments powered by Disqus