Despite the doom and gloom the beginning of the year 2000 poses for the IT industry, one of the leading business software suppliers is upbeat describing the issue as a benefit to its own business. However, according to Denver-based J.D. Edwards, until this and the issue of euro compatibility are dealt with, e-commerce cannot be expected to blossom in Europe.
So says Mr Trevor Salomon, marketing director for Northern Europe, the Middle East and Africa. Since going public last year, J.D. Edwards has grown impressively and is aiming to join the likes of SAP, Oracle and PeopleSoft in the top tier of enterprise-resource-planning (ERP) software suppliers.
ERP packages are increasingly being used in industries to manage finances, distribution, human resources, manufacturing and supply chains.
As suppliers of IT software and equipment, ERP companies are well placed to gauge some of the major trends in the industry, such as the encroachment of Microsoft's Windows NT server into former Unix territory, the development of e-commerce, or the effects of Asia's economic postboom hangover.
Traditionally closely associated with IBM AS/400 platforms, J.D. Edwards has now broadened its products to include Unix and NT solutions. Mr Salomon, formerly corporate communications director of SAP UK, says that while AS/400 sales are "still going to do very well", NT is "very much on the ascendancy". The company's last year-end figures showed 95 per cent of its business based on AS/400 systems, but Mr Salomon says this is levelling off while Unix, still popular where many concurrent users are needed, is "steady". The growth is in the NT market.
According to Mr Tiernan Quinn, director of Software Resources, J.D. Edwards's Irish distributor, neither Unix nor AS/400 figures largely in this market. Because NT is already being deployed on the desktop, he says, many Irish organisations are plumping for the Microsoft system when replacing older, legacy systems.
He says Irish firms are typically not big enough to have to worry about concerns over NT's ability to deal with a large number of users.
On the prospects for e-commerce, both Mr Salomon and Mr Quinn are downbeat. Mr Salomon says the year 2000 and euro issues are higher priorities, especially in Europe. He says companies are asking if the software they purchase allows them to run business across the Internet, but says he can't name one company in Britain implementing it. "Their current imperatives are the year 2000 and EMU, but they'll come back to it [e-commerce] because they do see that as a business enabler," he says.
Mr Quinn says it is the same in Ireland, but adds that a lack of standards between different vendors' ERP software is hampering business-to-business e-commerce transactions. "Until we see some of these standards emerge, e-commerce is only going to be [used] for some form of contact with the consumer."
But if the year 2000 problem is delaying e-commerce, it is managing to boost business in other areas. Despite eating into IT budgets of companies fixing their own systems, Mr Salomon says "the year 2000 is a benefit to us because we can deliver". He says ERP software solves the need for separate fixes to different strands of the business software, such as accounting, distribution and manufacturing.
J.D. Edwards is targeting what Mr Salomon calls "the huge volume of opportunity in the midmarket and smaller companies" in its effort to overtake its rivals in the ERP market. This is an ambitious task: J.D. Edwards' annual turnover of $650 million (£464 million) last October falls a long way short of German world leader SAP, whose first half sales this year were $2.1 billion. However, if Meta Group analysts are correct and the ERP outsourcing market grows from less than $1 billion this year to $8 billion in 2002, there will be room for the growth needed.
Meanwhile, the global fallout from Asia's economic woes may handicap industry in the US and Europe, threatening the growth plans of all the ERP companies. "The slowdown in Asia is going to have a global knock-on effect everywhere," says Mr Salomon. However, he predicts this will force some of the small ERP companies out of the market, meaning the larger ones will pick up extra business.
Determinedly positive, he also predicts business opportunities in Japan because many firms there have traditionally written their own business application software, much of which may not be year 2000 compliant. "They have got to buy systems anyway, notwithstanding the economic climate out there," he says.
So does the reliance on year 2000-related business mean the ERP industry will go quiet in 16 months time? Not so, according to Mr Quinn. The current shortage of consultants and the scramble for "quick-and-dirty" fixes mean there will be lots of scope for business application improvement after the year 2000, he says.
Who said the millennium bug was a headache for the IT industry?
Eoin Licken can be reached at elicken@irish-times.ie
