Oracle, NetSuite report strong adoption of SaaS-based ERP as SAP prepares S4 announcement. Is mission-critical ERP next into the cloud?
Oracle announced Friday that more than 600 companies worldwide have selected Oracle ERP Cloud and Oracle Enterprise Performance Management (EPM) Cloud apps, with 80% growth in the last quarter alone. That report arrived just one day after software-as-a-service (SaaS) ERP vendor NetSuite reported a 34% year-over-year revenue increase for fiscal year 2014.
"The fourth quarter of 2014 was our seventh consecutive quarter of more than 30% year-over-year recurring revenue growth," said NetSuite CEO Zach Nelson in company statement. "In addition, fiscal year 2014 represents a fifth consecutive year of accelerating recurring revenue growth."
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Want more on Oracle's cloud push? Read Oracle Details Cloud Cost-Cut Plan.
Are Oracle and NetSuite results a sign that ERP is following in the footsteps of CRM and HR apps into the cloud? That question will be raised this week as SAP, the ERP market leader, is set to announce a new, cloud-delivered S4 ERP suite on Tuesday. Earlier this month, SAP CEO Bill McDermott said his company expects to reach a tipping point by 2018 whereby it will see more revenue from cloud apps than from on-premises software.
But new ERP deals shouldn't be confused with all deployments, a universe still dominated by on-premises ERP. What's more, cloud ERP continues to find favor mostly among small and midsized businesses. Like NetSuite, cloud-ERP pure-play vendors Kenandy, Plex Systems, and QAD have focused almost entirely on midsized companies or divisions of larger companies. Epicor and Microsoft Dynamics have spun out SaaS-based versions of their flagship ERP software, but these, too, are predominantly aimed at midsized companies and business units of larger firms.
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