Analyst Gartner brought out yet another of its Magic Quadrant reports just before Christmas, this time on ERP software for "product-centric midmarket companies." The report points to the leading software companies in this space. But instead of celebrating the achievement of the winners, the report compelled me to ask a question that has bothered me for some time. Have medium enterprises lost their edge over small business when it comes to IT? Jyoti Banerjee, co-founder of M Institute, thinks the answer has got to be yes.
Let's face it. It's been a long time since Gartner's MQ reports have had any juice in them. These days the best writers on software sit outside the large analyst companies, of which Gartner is easily the largest. The report explores fourteen software products, and picks two as leaders (Microsoft Dynamics AX and SAP Business All-in-One), and reserves the visionary slot for Epicor 9. What was interesting was what the report does not say. Here are some issues that medium enterprises looking at this market will get little help on from the report:
- Where are all the cloud computing companies? Admittedly, Gartner does not bother with start-ups, which are a strong life-form in cloud computing, so a company like Aqilla will not get a look in. But what about NetSuite? And how about FinancialForce, the result of the JV between salesforce.com and Unit4?
- Mid-market in Gartner-speak is often about companies that are just a hair's breadth below large enterprises, not the sort of medium enterprises that M Institute rejoices in. As a result, there are mentions of companies, like JD Edwards and IFS, which are probably not relevant to 99% of medium enterprises.
- Gartner's Magic Quadrant celebrates companies that combine "ability to execute" with "completeness of vision." While the vision element sounded good when it first came out, and certainly imparted a certain magic to the MQ idea, I must say it feels irrelevant to the decision-making processes within a medium enterprise, when so many vendors meet a reasonable specification in a mature market. Would you prefer to know that your software vendor has completeness of vision or that the software meets your specific functional requirement? Enough said...
I guess my biggest issue is that there seems to be little innovation in the market, and Gartner in effect says that this is quite okay as mid-market companies don't seem to want it. Really? I wonder what happened to the medium enterprise of yore. Most medium companies I know have looked enviously at the sort of IT resources that large companies have access to. They too have wanted to do the cool things that their larger brethren can do.
Of course, they could console themselves that they were better off compared to the poor bunnies in small and micro companies. After all, they could afford better kit than the little guys could. And they could employ people to get the systems working, whether through employees or paying for outside help.
But that has changed as well. Today's small enterprise can collaborate within and without company boundaries, do a bank rec on a smartphone, and log customer details while at the customer's site. Easy for small companies using innovative products like Xero, Liquid, CapsuleCRM, or Microsoft's Office365. All for very little money indeed.
During a recent meeting, Xero's Gary Turner was absolutely clear on this point: the little guys actually have it better. And I have to agree. No medium enterprise that I know can cobble such systems together. They need the innovation that the little enterprises are benefiting from, particularly through cloud computing.
This is potentially dangerous territory. If a medium enterprise cannot compete with the scale of IT in a large enterprise, and cannot compete with the smart IT in a small company, then where does that leave them? Stuck with the not-so-cool stuff in Gartner's not-so-magical quadrant...
This blog has featured in Jyoti Banerjee's blog at KiteBlue.
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