Enterprise software supplier JD Edwards has abandoned its strategy
of operating directly as an ASP (application service provider) in
favour of working through channel partners and concentrating on its
core business, writes
Antony Adshead.
JD Edwards set up its direct ASP division for US customers at
the beginning of this year with the establishment of JDe.sourcing
and made plans for a worldwide roll-out. Rival ERP (enterprise
resource planning) suppliers Peoplesoft and SAP subsequently
launched in-house ASP divisions.
Analysts view the move as indicating an immaturity in the ASP
market as well as a rethink on the part of software suppliers. Tony
Lock, analyst at Bloor Research, said, "There's no doubt that ASP
is a good model, but do the software suppliers have the skills to
implement it? It is perhaps better for them to allow someone else
to take the blame if things go wrong rather than having their name
associated with ASP delivery failures. In any case, many of the
large corporates are hanging back from the ASP model and waiting
for improved bandwidth and reliability. It Is the best solution for
JD Edwards and we could well see SAP and Peoplesoft following
suit."
JD Edwards marketing director Trevor Salomon said, "I don't
agree that it looks bad. Companies have to make business decisions
and work to business plans which they believe will make money and
bring customers. We found that our customers wanted to work through
partner channels and so this is what we will provide."
JD Edwards is the first to abandon the model in favour of
developing partner channels. JDe.sourcing had only gained two
customers since its launch. Those accounts are being handed to
partners. On the upside, JD Edwards' partners number 22 in 18
countries, with another 40 applications for partnership being
currently handled.
In May, the company announced a restructure, with the loss of
800 jobs worldwide, but announced that the direct ASP model was one
to which the firm was firmly wedded.