17 April 2002 Manufacturing software company Baan – part of the production management group of troubled engineering company Invensys – has announced the launch of several new software products and a realignment of its consulting services business at its inForum user conference in Rome.
First, Baan has announced the launch of a new supply chain management (SCM) suite, iBaan for SCM. “The suite brings together all the products we have in this area,” said Henk de Ruiter, senior vice president of marketing and alliances at Baan.
Many of these products were picked up by Baan in 1997 and 1998, when the company bought production scheduling software company Berclain; demand planning software specialist Eventus; and distribution planning company Caps Logistics. However, despite significant investment in the sector Baan has experienced only limited success in the supply chain management market.
De Ruiter claims that iBaan for SCM is “the first open and comprehensive strategy available from a single supplier”. However, Mike Allocco, vice president of marketing and business development for Baan SCM, conceded that the company still has some work to do on the suite and, in particular, on its warehouse management capabilities. “There are still significant gaps,” he said.
Second, Baan previewed its product lifecycle management (PLM) suite, iBaan for PLM, which is due for release in June 2002 – considerably later than competitors. Specialist PLM software houses such as Agile Software, Matrix One and PTC have historically dominated this market.
However, such vendors have seen their primacy threatened with the launch of PLM software by enterprise application giants SAP and Oracle in the last 18 months. Baan executives consider SAP to be its main competitor, but also claimed that Baan recently beat PTC’s Windchill product in a head-to-head contest for a customer.
The third product announcement relates to the launch of iBaan OpenWorld Platform Connector for SAP, an integration tool that enables customers to integrate software from SAP with Baan products.
Baan president Laurens van der Tang said that the company recognised the importance of emerging web services standards – UDDI, SOAP, WSDL – that will enable companies to integrate software components, but defended the decision to launch a traditional, proprietary enterprise application integration (EAI) product.
“We know the world is moving to web services, and that they will be critical in integration projects. Having said that, who’s going to integrate your software using web services right now? No-one delivers web services out of the box just yet. We are committed to loosely-coupled, component-based systems in the long-term, but we have to provide working integration technology right now,” said van der Tang.
Commenting on the fact that the new product enables customers to preserve investments in competing products from former rival SAP, Van der Tang claimed: “we not only preach openness, we’ve proved it with this product. I think it’s the first time an enterprise software vendor has provided direct integration with a competing product”.
The connector was developed in collaboration with systems integrator e-Emphasys Technologies, as part of an internal integration project within Invensys in which Baan’s E-Sales module was integrated with SAP R/3. According to Baan executives, around 500 to 1,000 sites worldwide at Fortune 500 companies run a mixture of SAP and Baan software.
Finally, Baan announced a new global services initiative. The company’s new Global Solutions Services unit aims to ensure that Baan works more closely with its customers “across all stages of the solutions lifecycle – from initial design and implementation through to applications management, migration and solutions development.”
But according to Bruce Richardson, an analyst at AMR Research, while there is “nothing new” about Baan Global Solutions Services, it underscores the company’s increasing reliance on services revenues.
In 2000, according to Baan executives, the company derived 60% of its overall sales from license revenues, with services accounting for the remaining 40%. By contrast, services revenues have now overtaken license fees, with just 40% of revenues coming from software licenses and 60% from services.
