Baan Limps Forward
It is a testament to Dutch will and Dutch competence that there
even was a user conference in Rome last week. After all, Baan should
have died.
But avoiding death is not quite the same as living. Inforum proved
that. Attendance was meager. Messages were tired. There were many
quite real customer success stories and a bit of puzzling good news
about sales. But all in all, it was a subdued, not a happy occasion.
Bottom line. Baan is capable of becoming a force again, but it
is not on course to do so. It's worth watching, though, for if Baan
did become a force, now-reeling Invensys would get a nice boost,
and SAP and Oracle would be hurt.
(The current Invensys outlook treats Baan as a drag. The chairman
of Invensys told analysts in London not long ago that the only reason
it didn't sell off Baan was that it would make them technically
insolvent.)
User conferences are about leadership and direction. The messages must
give customers a reason to believe, despite all the evidence. Alas, the messages
were me-too. Baan announced a product suite consisting of PLM, CRM, SCM, and ERP. Not a
surprise. They also announced a focus on A&D, automotive, industrial equipment, high-tech,
process, and transportation. Totally familiar to Baan-watchers.
To some extent, this is Dutch understatement. The industries they're
targeting have always been poorly, poorly served by the ERP vendors.
Baan could be the great new hope for the people in these industries.
Combine the Invensys instrumentation and controls with the Baan
ERP/CRM, and you have a floor-to-store message that could sing.
Baan knows this, but also knows that technologically, it is premature. They may be waiting
until they can back up the promises with something. The danger is that they'll wait too long.
Why is it premature? Baan's functionality-by-acquisition strategy
gave it CRM, PLM, SCM, transportation, etc. all right, but each
one is designed for different industries, and none is really oriented
toward the valve or tractor manufacturers. Even Invensys is primarily
a process industry player, and Baan IV is a discrete product. (Baan
does have Marcam, but has always underplayed that strength.)
On the selling side, Laurens van der Tang said that Baan had gained
350 new customers (no previous association with Baan) in the 18
months since the acquisition. This would be very good news, though
it's hard to see how it happened. (I wouldn't have been sure that
there were 350 new deals in ERP in the last 18 months.)
Income is also coming in from Invensys and from customers like Flextronics, who are expanding and
taking Baan with them. But several customers who had presented on their success with Baan
were wondering what reason they had even to upgrade. Development has been slow, they said, and I agree.
Most distressing to me was how difficult it is for Baan to bring out its
strengths. Baan private-labels SAP Portals, a good product, and a natural thing
to sell into the installed base. But the salespeople don't know how to sell it and
don't, so far as I can tell, believe in it. Baan also sells Protean, a great
product, but at a presentation, no one from Baan was there even to correct
gross misconceptions about the product.
The danger for Baan is that customers will abandon them for Oracle and SAP, unless there
is a compelling reason not to. Integration from floor-to-store would be compelling. So would
Baan as low-cost provider.
Consensus at the conference was that Oracle and SAP won't loom
for some years, but I'd bet it will be sooner. True, it takes a
crowbar to get these products out. On the other hand, the cost of
running them is substantial.
This may already be too long for you, but I don't want to give the
impression that it is a land of desolation. Baan's new PLM product
may be too little too late, but there are some excellent ideas in it. And
Protean which has always been a product that is badly needed, with no
plausible competitor, has gotten new management and is showing some signs
of life.
See also our other recent Short Takes.
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