Epicor Pledges Fealty to the Midmarket


Archived Published: 30 May 2001 ID: G0098421

Analyst(s):

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Summary

Selling Platinum for Windows (PFW) to Sage Software will help Epicor Software narrow its offerings and align PFW customers with a vendor expert in helping small enterprises meet their PC-based application needs.

News Analysis

Event

On 21 May 2001, Epicor, a provider of integrated enterprise and e-business software for the midmarket, announced it would sell its PFW product line to Sage Software for $7 million. The transaction is expected to close by 15 June 2001.

Analysis

This announcement signals that Epicor recognizes it must narrow its focus and return to profitability. The planned sale of PFW also resolves concerns from enterprises that support for the product might end after 2001.

In Gartner's opinion, Epicor’s acquisition hunger during the last few years was a case of its eyes being bigger than its stomach. Gartner believes that overly stretched resources diminished Epicor's financial position, and that developing, marketing and servicing an array of diverse products confused the market and in some cases even Epicor's sales channel. Moreover, while attempting to sustain a plethora of products, Epicor simultaneously trumpeted its integrated midmarket enterprise resource planning (ERP) II flagship suite, “e by Epicor.” Thus, too many messages and not enough consistent execution marred Epicor's ability to compete effectively against Sage’s Enterprise and Microsoft Great Plains' eEnterprise application.

With Epicor's “e” system finally coming together — including an integrated capability that extends from its eFrontOffice through eCommerce suite for suppliers and partners — Epicor hopes to turn the corner and restore profitability. Divestiture of product lines — even profitable ones — that detract from a focus on offering collaborative systems for the midmarket heralds greater focus and streamlined execution. However, until enterprises perceive that Epicor has regained its financial health, its "e" products risk being overlooked, despite their appeal.

Sage continues to gain midmarket momentum with its collaborative Enterprise suite, and it also knows how to support customers in the market's low end through its commitment to Peachtree Software and MAS90/200 products (Sage owns Peachtree). PFW customers should expect Sage to build immediate trust by committing to maintain and enhance support for the product. And, with PFW's penetration into the South American market, Sage will gain a foothold for further expansion of its other products.

Epicor requires exclusive distribution channels only for its "e by Epicor" product suite. Therefore, Epicor's business partners are free to nurture their relationship with Sage at the low end (with PFW), while maintaining their relationship with Epicor by selling the "e by Epicor" suite in the midmarket. Epicor customers should continue to evaluate "e" on their short lists for upward migration. Prospects, however, should wait until Epicor returns to profitability. (Epicor claims that will occur by 4Q01.) Enterprises that use PFW can breathe easier. Their product has gotten a new lease on life from a vendor with a solid understanding of, and commitment to, their market.

Analytical Source : Robert Anderson, Information Technology Management

© 2001 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartners research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

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