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JD Edwards unveils "bite-sized" modules

9 February 2006  

"The old JD Edwards tried to develop large monolithic pieces of software. [But] customers don't want monolithic applications ... they just don't have the money," says Bob Dutkowsky, the new CEO of JD Edwards. Now, Dutkowsky says that JD Edwards will re-develop and sell its software as components.

"The old JD Edwards tried to develop large monolithic pieces of software. [But] customers don't want monolithic applications ... they just don't have the money," says Bob Dutkowsky, the new CEO of JD Edwards.

In a bid to move with the times - and to try and reverse falling licence revenues at the enterprise resource planning (ERP) software vendor - Dutkowsky says that JD Edwards will re-develop and sell its software as components, rather than all encompassing packages.

This will involve repackaging the company's product set, which Dutkowsky will do by pulling all JD Edwards' applications under the umbrella of the JD Edwards 5 package and

 
 

Company name: JD Edwards

HQ: Denver, Colorado

Main activity: ERP software

Last full year revenues: $874.0 million

Last full year net loss: -$179.8 million

Key issue: JD Edwards is repackaging its applications suite into modular components based around business processes. But it must not lose sight of the need to deliver technologies such as supplier relationship management and product lifecycle management that its users are crying out for.

www.jdedwards.com

 
 
offer smaller, web-based modules based around business processes, spanning multiple components.

Yet six months into his job, there is still little of substance behind Dutkowsky's vision and, perhaps more worrying, a noticeable lack of product development in key areas.

JD Edwards has not been totally quiet. The company has released a number of product upgrades, new modules and a revamped services framework in an attempt to flesh out JD Edwards 5. But analysts have criticised these product "enhancements", including the latest upgrade to its core ERP suite (ERP 8.0), as bringing only minor improvements in features and capabilities.

Chief technical officer Mike Madden is sympathetic to such criticisms. "If you look at them individually, I'd probably yawn too," he says. "[But] the reason for JD Edwards 5 is for us to show the world that business processes are not confined to ERP, but involve all our products working together."

For example, he says, the "order to cash" process spans multiple applications including customer relationship management, electronic data interchange (EDI), warehouse management and transport management. In this way, JD Edwards hopes to draw attention to a product range that extends far beyond the traditional concept of ERP.

This is understandable. In its core ERP market, JD Edwards is facing falling demand and increased competition for mid-tier customers from vendors such as market leader SAP and database and applications giant Oracle. In future, it may also face competition from Microsoft, following its recent acquisition of Denmark's Navision.

Dutkowsky admits that times are particularly tough. In this stagnant market, he says, vendors will be forced to "eat each others' children for a while" in the scrabble to maintain or increase market share.

Part of his plan involves "attracting new customers with other applications," says Dutkowsky, pointing to JD Edwards' acquisition of customer relationship management software technology, with its November 2001 purchase of YOUcentric.

But Denver, Colorado-based JD Edwards is still "behind the curve in supplier relationship management (SRM) and product lifecycle management (PLM)," compared to PeopleSoft and SAP, says analyst and Meta Group research fellow Dick Kuiper. "Its supplier relationship management offering is part vision and only part deliverable," he adds.

Quite simply, JD Edwards software needs further development to flesh out these key areas. To his credit, Dutkowsky has promised that "over the next two years, we will deliver more features and functionality than over any other two-year period in JD Edwards' history."

This will be delivered in the new JD Edwards 5 framework, which allows "products to be enhanced incrementally without requiring customers to update all modules and products," says AMR Research analyst Bill Swanton. A revamped pricing structure has also been introduced to reflect this new approach.

This should appeal to its loyal 6,000-strong installed base, which is also under cost-cutting pressure. "The difference here is that JD Edwards is not pushing its users into new technology or business processes," says Swanton.

However, if the company is to return to growth and convince customers to part with their cash, JD Edwards must deliver more compelling products with broader capabilities. And Dutkowsky will be expected to deliver soon.


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