IBM – How IBM i Suits Into the Evolving ERP Market

November 30, 2020

Alex Woodie

IBM i stays a strong platform on which to run an ERP system. However with the shift to the cloud, to not point out a surge in homegrown software growth on IBM i, the platform’s future for packaged ERP deployments is unsure.

The IBM midrange platform has a wealthy historical past of packaged ERP functions for a variety of enterprise varieties. From discrete manufacturing and trucking to banking and healthcare administration, software program distributors have focused the IBM i platform and its predecessors to run built-in ERP programs and different related kinds of enterprise functions for over many years.

However the go-go ERP deployments of the 1990s and 2000s at the moment are a distant reminiscence, and the general market has modified dramatically. Whereas there may be nonetheless a comparatively secure group of distributors supporting the IBM i with general-purpose and industry-specific ERP packages, it has been years since a top-tier ISV has introduced new plans to help the IBM i platform with its software program. Certainly, the notion of deploying “software” to a “server” is more and more turning into an anachronism within the cloud-first world.

Nevertheless, there may be excellent news. When it comes to the general ERP market, it’s nonetheless on a progress trajectory. (In different phrases, no person has discovered learn how to exchange ERP with AI but.) In line with Gartner, the worldwide ERP market grew 9 % final 12 months to succeed in $39 billion. The ERP market is worth $10 billion in North America, nevertheless it’s rising the quickest within the Asia Pacific area, with a CAGR of 13.2 % by means of 2026, in comparison with 10.2 % globally, in line with a February report by Allied Market Analysis.

The IBM i platform’s share of that total market is anyone’s guess. However when it comes to prime ERP distributors on IBM i, we see a constant mixture of ERP merchandise from big-name distributors.

In line with HelpSystems’ 2020 IBM i Market Survey, Oracle was the highest ERP vendor, as 16 % of the respondents to its survey stated they have been operating both JD Edwards World or EnterpriseOne packages (or the older OneWorld system) on the platform. That was up from 11 % in 2019.

Within the quantity two slot with a 14 % market share was Infor, which has completed extra to consolidate the ERP market on IBM i than anyone. The corporate nonetheless helps IBM i-centric ERP programs like XA (MAPICS), LX (BPCS), M3 (Movex), Infinium, and System21, to not point out a gaggle of older IBM i-based programs that haven’t been up to date shortly (PRMS, PRISM, KBM, BRAIN). Infor was flat year-to-year in line with HelpSystems survey.

Rounding out the highest three general-purpose ERP programs on IBM i used to be SAP, which claims a stunning 9 % of the IBM i put in base with its Enterprise Suite providing, up from 7 % in 2019, in line with the HelpSystems survey (which isn’t precisely a randomly chosen pattern however is the perfect measure now we have of the IBM i citizens now we have).

Past these general-purpose ERP programs, HelpSystems tracked quite a lot of industry-specific enterprise functions, together with the ever-popular warehouse administration system from Manhattan Associates; the core banking programs from Fiserv and Jack Henry; the TMW truck dispatching software program now owned by Trimble; and healthcare administration programs from MEDHOST and McKesson.

These functions may proceed to be extensively deployed and trusted by the businesses that use them, however these aren’t fast-growing sectors of the software program {industry}. In lots of circumstances, you’d be hard-pressed to even know that these business-critical functions are even operating on the IBM i platform.

Many of those software program distributors want to transfer these functions to the cloud and promote entry to them by way of the software program as a service (SaaS) technique. However by advantage of the truth that these functions run on the IBM i working system–and never an X86 OS like Linux or Home windows–that journey to the cloud is just not a simple affair. It additionally offers a barrier for IBM i-based ERP programs to journey the expansion in cloud-based ERP companies.

In line with Gartner, the way forward for ERP exists within the cloud. However the tempo of migration to the cloud relies on the kind of ERP system you’re speaking about. For example, the shift to cloud for “administrative ERP,” by which it means accounting, financials, and HR/HCM capabilities, is quicker than it’s for manufacturing-oriented ERP.

“Large and global enterprises are now standardizing supply chain/manufacturing, moving from a hybrid multicloud/on-premises approach to running on a single cloud ERP suite,” the corporate says in its June 2020 Magic Quadrant for Cloud ERP for Product-Centric Enterprises report.

“This is occurring at a slower rate than the adoption of administrative ERP. We expect the adoption of manufacturing and operations in the cloud to accelerate in the future, but the market is still adolescent for these domains,” it continues.

It shouldn’t come as a shock that cloud ERP deployments are rising sooner than the general market. In 2018, the “enterprise application growth rate” for ERP programs deployed within the public cloud was 20.7 %, in line with the IDC. Trying ahead, ERP programs will help digital transformation initiatives, in line with Mickey North Rizza, IDC’s program vp for enterprise functions and digital commerce.

“Cloud, AI/cognitive, and big data/analytics, has molded many ERP solutions into innovative technology foundations, reshaping the enterprise view, experience, and use of ERP solutions,” Rizza stated in 2019.

IBM is doing quite a bit to push the event of AI and cognitive functions on its Energy Programs server, if not IBM i itself. To the extent that firms with established ERP programs on the IBM i platform can work out learn how to use AI and large information analytics operating on different platforms to fortify and develop their companies, it might assist to cement these core transactional programs on IBM i. In spite of everything, we all know how dangerous it may be to maneuver off established transactional programs like IBM i and z/OS.

This brings up one other fascinating think about the way forward for ERP on IBM i: a surge of homegrown growth. What is probably most fascinating from the 2020 Market survey was the speed of in-house growth. In line with HelpSystems, 73 % of respondents reported creating in-house programs, a 9 % improve from the 12 months earlier than.

“Homegrown programs represent many years of diligence in creating and improving the application in order to deliver unique and ongoing value to the organization,” HelpSystems says in its report. “These functions play an enormous position in ensuring IBM i sticks round in lots of organizations.”

So whereas packaged ERP programs on IBM i may not be the expansion promote it as soon as was, and whereas IBM i-based SaaS choices on the general public cloud are a non-starter, firms across the midrange are determining learn how to leverage the platform and its many advantages in different methods, which is nice information for the well being of IBM i.

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