Lawson CUE provided insight into the vendor's plans and current releases for all its product lines, but here we'll focus on the announcements relevant to Lawson for Equipment Service Management & Rental (ESM&R). Users within construction, mining, agriculture, material handling, medical equipment, oilfield services and transportation must understand these developments and use them as input to make appropriate decisions regarding investments in Lawson software.

• Lawson Smart Office, Lawson Enterprise Search and Analytics are available for ESM&R as of version 1.2, released in November 2009.

• Lawson has refined its vertical strategy to include new subverticals within ESM&R, such as material handling, medical equipment, oilfield services and transportation, while still maintaining a focus and commitment on construction, mining and agriculture equipment dealers.

• The company announced Internal Cloud Services in addition to External Cloud Services, which was previously announced in March 2010. Both cloud services have long-range potential to help drive Lawson ESM&R into the midmarket, but the product isn't currently available for subscription on the External Cloud.

• For current Lawson customers: Consider adding Smart Office, Enterprise Search and Analytics to your Lawson for ESM&R deployments. The interfaces are highly customizable, easy to navigate and built on a modern architecture. These products should fundamentally change how service information is accessed, shortening time frames on common tasks.

• For prospective Lawson customers: Review what Lawson for ESM&R has to offer, especially if you're looking at service management or ERP applications.

• Realize that Lawson for ESM&R isn't currently available for subscription on the External Cloud, so it shouldn't be considered for near-term purchasing decisions. However, customers can use the product on Lawson's Internal Cloud Services.

Lawson for ESM&R is an enterprise software package aimed at meeting the needs of dealers, distributors and OEMs of heavy equipment and other large assets. Although most of the major announcements at CUE 2010 weren't exclusive to the product — cloud, for example — the company consistently mentioned that it was one of the major areas of focus.

With $30 million in revenue year to date, 11 customers (including five of the top 10 Caterpillar [Cat] dealers worldwide), a growing pipeline, overall company operating margins at 16% and continued executive commitment, Lawson for ESM&R should continue to grow in 2010. It will be a "proof is in the pudding" year for the product, since some of the flagship customers that signed at the end of 2009 will be going live with their implementations. The Caterpillar dealers waiting to see what would happen with the Finning and Zeppelin implementations will finally have their answers, and it will be time for them to make their own decisions.

Here's a little background on the Lawson-Caterpillar connection: When Caterpillar told the dealers in its network they were on their own in terms of software, Lawson aggressively attacked the market and built out what is now the Lawson for ESM&R product, which includes a Caterpillar Integration Framework. This doesn't mean that the product is for Cat dealers only. On the contrary, it's built and based on the M3 intellectual property (IP), so it's appropriate for a wide range of manufacturing verticals. The ESM&R product includes additional functionality that targets the unique aspects of running a construction, mining or agricultural machinery dealership.

From a technology perspective, Lawson has made Lawson Smart Office, Lawson Enterprise Search and Analytics available to ESM&R customers as of the 1.2 version, released in November 2009. Each of these technologies vastly improves the usability and effectiveness of the application, so we strongly recommend them for consideration. Additional incremental functionality was added to the 1.2 release that made improvements to planning and scheduling, mobility, skills management and work order management.

As for the 1.3 release, the company would only talk publicly about one area of development: creating a tighter integration between production planning and maintenance planning. When should an asset be taken out of production to minimize the impact to both organizations? This is a common inquiry Gartner receives, and one that is difficult to solve. This feature, which is typically part of planning or ERP applications, should be well received. It directly affects the profitability of a service operation, which is consistently one of the top drivers for IT investment in service software. But even though the feature is important to many organizations, prospects currently evaluating Lawson for ESM&R shouldn't wait for 1.3 and continue their evaluations of 1.2.

Regarding the cloud, Lawson for ESM&R isn't currently available for subscription on the External Cloud, so it shouldn't be a major consideration for near-term investments. Internal Cloud Services, including virtual appliances for Lawson Smart Office and Lawson Enterprise Search and cloud enablement in the form of virtualized server hardware, are available for Lawson for ESM&R customers and should be evaluated as part of an overall total cost of ownership (TCO) exercise.

On 25 April through 28 April 2010, Lawson held CUE 2010, its annual user event in San Antonio, Texas. There were approximately 2,000 customers in attendance, the majority of which were S3 customers, given Lawson's penetration in the United States. Customers use CUE to gain perspective on new Lawson offerings and understand how peers are deploying the company's products.

Lawson has provided fairly consistent messaging during the past few years, and CUE 2010 was typical of prior events where the company unveiled new products, continued to refine its strategy and communicated new service offerings. This research provides an overview of the announcements made as they pertain to Lawson for ESM&R and provides guidance for end-user organizations on the technology now available to ESM&R customers: Lawson Smart Office, Lawson Enterprise Search and Analytics. It also addresses Lawson's continued refinement of its vertical strategy and how it may affect future releases of the product.

Lawson Smart Office was originally introduced at CUE in 2008 for customers on the latest versions of S3 and M3, but it wasn't immediately available to ESM&R customers or customers on older releases of the products. As of the 1.2 release of ESM&R, however, this has changed. It's a welcomed announcement, too, since Smart Office is one of the most modern user interfaces in the service management software market.

The product is built on Microsoft's .NET architecture and uses Windows Presentation Foundation. Smart Office lets users customize their desktops with specific applications, screens and widgets that pull data from Lawson products, Microsoft Office applications, and the Web. Instead of having to drill down into particular screens over and over again, favorites can be added to a ribbon at the top of the desktop for easy, one-click access.

Customers should consider using Smart Office with ESM&R to gain efficiencies through better use of the service management applications. Smart Office requires separate licensing.

Lawson Enterprise Search was announced at CUE in 2009 for S3 customers, but it wasn't available to ESM&R at the time. But just like with Smart Office, this has changed with ESM&R's 1.2 release. Lawson Enterprise Search's main benefit is that it can search Lawson data and bring back results in context. For example, if a user searches for "ABC123," the application will display not just the results, but the kinds of results — for example, whether "ABC123" is a customer number, invoice or work order — and then let the user drill down into the actual screen within any Lawson product. Searches can be dragged onto the Smart Office desktop as a widget, and the application will refresh the search automatically.

Many customers spoke about how much time this has saved their users, and we highly recommend that companies consider adding Enterprise Search to Lawson for ESM&R. Enterprise Search requires separate licensing.

Lawson Analytics for ESM&R includes 50 prebuilt key performance indicators (KPIs) and 20 scorecard templates that can display contract profitability, equipment condition and reliability, resource utilization and more. Most of the screens looked modern and easy to use, but we would like to see the ability to drag a report onto the Smart Office desktop as a widget, similar to Enterprise Search.

Analytical functionality is a necessary technology enabler to help companies mature their service businesses. Most of Lawson's competitors in service management either already have analytical tools or are actively engaged in building them out. Although Lawson for ESM&R previously featured M3 Analytics, only with its 1.2 release did it include the aforementioned KPIs and scorecards.

ESM&R customers and prospects should consider Lawson Analytics for their implementations. Lawson Analytics requires separate licensing.

Lawson for ESM&R now has a QuickStep program that includes preconfigured business processes, which typically cover 70% to 90% of customer processes. When Gartner first wrote about the release of the ESM&R product, we stated how a QuickStep program would show additional commitment to the space. The company has delivered on this front.

The QuickStep program includes best practices, templates and lessons from both M3 and ESM&R rollouts to cut down on implementation times. Several ESM&R customers have successfully used QuickStep in their implementations, with one customer going live in approximately six weeks. The value of the program is clear, especially when comparing this example with a few early adopters of ESM&R without QuickStep, which are now going on their second year of implementation. Two early customers we spoke with confessed that internal challenges (poor change management, for example) were the primary reasons for the delay, so it wouldn't necessarily be appropriate to consider these time frames typical. Additionally, one of the companies had originally decided to implement M3 and then switched to ESM&R.

We expect most major global rollouts to be completed in 12 to 18 months — Lawson posits it will be less than 12 months — with smaller QuickStep implementations finished in less than three months. External Cloud Services, which isn't currently available to ESM&R customers on a subscription basis, has the potential to shorten that time frame even further.

Overall, Lawson's vertical strategy isn't new, but there are a few refinements within the ESM&R group that are worth mentioning. The company is taking a two-pronged approach: look for new but related verticals, and subdivide current verticals to continue establishing differentiation. For example, the industrial vertical will be split into the following:

• Construction, mining and agriculture (including the Cat dealerships and other dealerships)

• Material handling equipment (both OEMs and dealerships)

• Industrial equipment (e.g., power generation, machinery, engines and turbines)

• Transportation (e.g., truck rentals and large fleet owners)

Other verticals to address include medical and laboratory equipment and oilfield services. Lawson will compete directly with SAP in the medical equipment market, so expect the company to look for a subvertical to carve out its niche, with home health services one possibility.

Lawson continues to refine its vertical strategies, using the opportunity to reorganize its sales, marketing and development resources. The company's willingness to create industry-specific integrations (e.g., working with Caterpillar's dealer groups to understand their individual processes and integration points with Cat back-end systems) will continue to establish market credibility. If the release of the Cat Integration Framework is any indication, expect deep integration with operational systems to continue in each of the above areas.

The company will keep training internal employees and partners and hire when necessary to build out the knowledge base needed to address new markets. However, of the approximately 1,200 professional services resources worldwide, only about 10% are assigned to ESM&R. This limits Lawson somewhat to delivering implementations by itself, even though it often relies on partners to assist. But this is somewhat by design, especially since the company is looking to rebalance its revenue mix between licenses, maintenance and service. This adds an additional step for the customer, however: evaluating the internal knowledge of the implementation partner.

There are no immediate plans to support Lawson for ESM&R on External Cloud Services, so it shouldn't factor into customer or prospect short-term plans. The company stated that all products would eventually be available through External Cloud Services, but it couldn't commit to a time frame.

Lawson Internal Cloud Services are available for Lawson for ESM&R in the form of virtualized appliances for Lawson Smart Office, Lawson Enterprise Search, Lawson Cloud Console, and virtualization of ESM&R across a company's internal hardware. One non-ESM&R customer projected substantial savings in hardware reduction from deploying Lawson products on an internal cloud, so this should be considered part of an overall TCO exercise.

Gartner discusses the intricacies of cloud deployments in other research notes, but in terms of the potential impact to ESM&R customers, we see opportunities for the following:

• Companies — that is, both dealerships and OEMs — on aging hardware platforms (e.g., AS/400) that were thinking about upgrading, but didn't want to invest in new capital expenditures

• Smaller dealerships that were already exploring software-as-a-service (SaaS) or cloud applications

Cloud deployments have the potential to provide a relatively easy environment to create test, development or disaster recovery instances of an application and allow customers to rightsize their hardware and processing needs. They also provide the benefit of not having to invest in capital equipment. What's not clear, though, is how changes to the applications will be handled, what the pricing structure will be, or how Lawson will differentiate External Cloud Services from its existing managed services. And for companies still turned off by cloud delivery options because of possible risks involving security and data access? Security is a serious consideration, and buyers should always do the proper due diligence, but also ask yourselves this: Can your company realistically provide better uptime, reliability and security than Amazon.com or any other major cloud provider?

Although none of these announcements were new (in fact, a few — Lawson Enterprise Search, for example — trailed the release dates of their competitors), they're still welcome additions to the ESM&R product. They should help customers achieve the most value out of their ESM&R deployments by cutting down implementation times or increasing user efficiency.