Forrester Evaluates Enterprise Applications Software Licensing
As companies begin to replace pre-Y2K ERP systems, they are challenging vendors to provide licenses that incorporate more flexibility and better software life-cycle support. Vendors have answered with new licensing metrics to help companies avoid overpayment. With these new choices, businesses must decide if they need advanced licensing metrics to account for complex business needs or whether simple, predefined options will suffice. In a new report, Forrester Research, Inc. (Nasdaq: FORR) uses The Forrester Wave™ methodology to help businesses determine which vendors will best meet their licensing requirements.
The report creates two different evaluations of nine vendors: Epicor, IFS, Intentia, Lawson, Microsoft, Oracle, QAD, SAP, and SSA Global. One evaluation examines how vendors address complex licensing metrics, while the other looks at providing simplified metrics; both evaluate the flexibility of licensing policies. All vendors in the study have core ERP suites and significant market presence, with annual revenues of more than $200 million. Forrester evaluates vendors on approximately 65 criteria grouped into three categories: current offering, strategy, and market presence.
Forrester assessed the maximum number of options that a vendor provided in license metrics and the maximum number of upfront life-cycle policies when examining complex licensing. Those with the most options fared best.
- Oracle leads the pack in accommodating complexity. Upfront licensing policies and a wide choice of licensing metrics for the E-Business Suite factor into Oracle¿s strong showing.
- Epicor offers competitive options to the midmarket. Epicor allows for complexity and provides generous upfront licensing policies by focusing exclusively on user-based metrics, including concurrent user models.
- QAD gives options to businesses. With the introduction of usage-based metrics and the replacement of its concurrent user model with a single-named user, QAD has succeeded in accommodating business complexity while being upfront with licensing policies.
The simplified licensing metrics evaluation gave preference to vendors with two or fewer ways to measure user-based and usage-based licenses. Vendors with limited choices scored well in this evaluation.
- SAP has a slight lead. Although SAP has rigid software life-cycle licensing policies, its current offering and dominant market presence allowed the company to take the lead, in front of Epicor. SAP is in the lead position in delivering simplicity and elegance.
- Epicor is almost at the top. Epicor has a strong software life-cycle ownership experience and a strong current offering.
- Microsoft is a top vendor. Like Epicor, Microsoft has a top score in software life-cycle ownership experience, and very high scores in regard to strategy. Microsoft will also be implementing its new role-based pricing in the Dynamics product line.
- Oracle is also a leader. Oracle had a strong showing in strategy and current offerings. The company fared well against Microsoft and Epicor.
Details of this evaluation and more information on all vendors can be found in “The Forrester Wave™: Enterprise Applications Software Licensing, Q4 2005” and is available to Forrester WholeView 2™ clients at www.forrester.com.