Switching SaaS ERP Software Providers
Many SaaS providers are announcing customer wins. In many cases, these wins are from companies upgrading from QuickBooks or a legacy on-premise solution. However, a new trend is beginning to surface … SaaS ERP customers switching from one SaaS provider to another.
It is not likely that switching SaaS ERP companies will become like switching long distance companies in the 1990′s, but there are some trends beginning to appear.
Epicor Customer Announcements
Epicor Software Corporation (EPIC) today announced that two customers switched to Epicor Express, the on-demand version of Epicor 9. One of these customers switched from an existing ERP SaaS solution.
Dayson Polymers, LLC, a full line distributor specializing in engineering plastic resins, is currently a three-person company that operates out of remote offices throughout the U.S., requiring them to implement a Web-based system to easily access and manage their business. Having previously invested in a SaaS ERP solution, Dayson switched to Epicor Express as a result of poor customer service and escalating subscription fees.
“With our previous SaaS ERP provider it took up to six months to resolve an issue, forcing us to carry on business with workarounds until the problem was fixed. Exceptional customer service and a regional support team were among the main factors that led us to choose Epicor,” said Chris Schmeltzer, manager, Dayson Polymers. “We also experienced increasing yearly subscription fees and finally had to seek a more cost-effective solution.”
Other Announcements
Intacct recently announced a customer win that involved a customer switching from NetSuite. In the press release it says that Matrix Absence Management switched in order to lower their total cost of ownership and improve the flexibility offered.
Acumatica recently announced a customer win that involved a customer switching from an existing SaaS ERP solution to Acumatica’s Cloud ERP software. The Quantum Group switched for many of the same reasons suggested above: control over costs, support, and user licensing.
Following the launch of SAP’s Business ByDesign in August, it will be interesting to see what the first customer announcements are. Will they be existing SAP clients, wins from other client-server solutions, or wins from other SaaS products.
ERP Cloud News Commentary
It is not likely that switching SaaS ERP companies will become like switching long distance companies in the 1990′s. Switching your ERP solution involves more than just placing a service order – there are hours of data migration and training which need to occur before you are fully operational on a new system. Nevertheless, the evidence above suggests that some companies have experienced problems that make a switch worth the effort.
Why Switch ERP
The top reason cited for switching was “lack of pricing flexiblity,” but the lack of stellar customer support, and lack of system flexibility were also cited.
SaaS Vendor Lock-In
The recent switching suggests that vendor lock-in may not be a significant phenomenon in the SaaS ERP space. However, all of the recent switching announcements involve companies that have unique configurations, but do not have any significant customizations or add-on solutions. For this reason, price was more critical than functionality and the barrier to switch was lower. As companies interface their SaaS solutions with on-premise systems, the ability to switch providers may become more complicated. So, although lock-in was not a significant issue in these announcements (most were migrated in 30-60 days), it may be a bigger issue with larger customers with customized solutions.
It seems the vendors not forcing a SaaS vendor lock-in such as Microsoft for CRM and Acumatica for ERP are providing more value. I’m curious why more vendors are not offering this option. No one likes being locked in and many of the current ERP vendors and the biggest CRM vendor lock-in the whole environment rather than just the software product.
My company hosts Microsoft Dynamics GP as a subscription service. We’re one of the few Dynamics VARs in Canada that do so. We have had Clients switch from Dynamics GP on-premise to Dynamics GP hosted/SaaS as well.
The hosted model tends to reduce total cost of ownership substantially and is attratcive to companies that do not want to be locked in to a large software purchase and a set number of users.