Network Effects in the ERP Systems Market - An Analysis of the Implications of Business Intelligence and Cloud Computing

Presently the vendors of ERP software are facing threats as well as opportunities by new technological challenges. In particular, business intelligence and cloud computing are, besides others, important trends in the ERP market. It is crucial for the ERP vendors to gain strong positions in both fields to remain competitive. Since the software market is often influenced by network effect we analyzed four big ERP vendors, namely Microsoft, Oracle, Sage, and SAP with respect to these effects on business intelligence and cloud computing. We enriched our analysis by IBM which is not an ERP vendor but is a leading IT company in both fields: business intelligence as well as cloud computing. The four ERP vendors have notably different histories. While SAP started as an ERP vendor, Oracl began as a vendor of data base systems. Microsoft’s most important products are still the operating system Windows and its office suite. Sage, like SAP, is an ERP vendor but primarily addresses SME while SAP’s main strength is still in the field of EPR systems for large co-operations.