Sun/Stesud Deal Demonstrates Open Source Opportunity in ERP Channel

Sun (JAVA) on September 8, 2008, announced that it has signed a "...Multi-Million Dollar Deal with Leading ERP Software Company" Stesud to deploy MySQL Enterprise and the GlassFish application server. Most of the time I dismiss a PR release that is so over the top. But, when some translation to English is required before the press release is written, I figure maybe something got lost in translation. 

That appears to be the case with this Sun/Stesud deal, although the trend the deal highlights may just be opening the door wider for IBM (IBM) to get back in the ERP business than it is for Sun to enter it. This deal also means that Microsoft (MSFT) does not have the small/medium enteprise [SME] market locked up the way it should have, at least outside the U.S. 

Of course, obviously Stesud of Marche-en-Famenne, Belguim is not a leading ERP software company. It's a respectable 40-person shop that mostly provides software to Belgian city governments. In fact, according to this extensive but two-year old research, Stesud (part of a group called Printamatique if my French is correct) is not even the leader in providing ERP to Belgian city governments. A provider named Ciger--an IBM business partner--is (Ciger is now part of a group called Adhesis).  

What the deal demonstrates, though, is the opportunity for software businesses in the ERP channel to use open source software to get in the seams of the ERP market caused by industry/geography/size of the company. There is a huge ERP upgrade opportunity that is growing worldwide. In this article in ebizQ in February, I discussed how this works (the article also talks about some of the open source companies such as Compiere that want to take advantage). 

Although I have yet to talk to Stesud, it appears to be a heritage Gupta/SQLBase/NetWare shop that is going to move its applications to MySQL/GlassFish. IBM would similarly like to move its large base of iSeries/OS-400 partners to Linux/enterpriseDB/Websphere. Of course, Microsoft would like to move such suppliers over to Windows or even to Small Business Live. All three should be fighting over such heritage software players as Stesud.

As an aside, Stesud's revenue is about $10 million a year or so depending on euro-dollar exchange rate. That means I don't see Stesud spending multimillion dollars directly on Sun database and app server open source maintenance contracts or flowing multi-millions of dollars from its Belgian commune clients back to Sun.  

But the idea demonstrated in the deal is the correct model for Sun and IBM.  However, Sun has little experience with this ERP channel approach in ERP while IBM is the master of it.

(I will update if I hear from Sun or SteSud about the current software installed or the way the revenue might flow.)

Comments

[douglas dooley:]

i also reflected on this announcement by Sun with the ERP vendor:

douglasdooley.blogspot...

thanks for the additional details, that you provided...

2008 Sep 11 03:13 PM