“We Don’t want to make Cloud a Religion (for ERP)” – CTO Himanshu Palsule
In its latest move in support of the worldwide trend towards the Cloud, Epicor Software Corporation, announced its expanded partnership with Microsoft at its Customer Conference in Nashville. This partnership will see the availability of Epicor ERP to more global customers over the Microsoft’s Azure public cloud platform.
However, CEO and President Steve Murphy hinted to analysts and journalist at the Media Q&A session at Insights 2018 in Nashville that they are not really pushing Cloud so hard to its customers.
He said, “Actually Epicor spends a really significant amount of money to develop ERP solutions in the Cloud, almost to a disproportionate amount. This is so as to be able to support the hybrid on-premise and Cloud approach we advocate to all of our customers.”
CTO Himanshu Palsule says that although Epicor has pledged full commitment to Cloud, as seen in its Cloud investments and ISV Alliance programme, “…the company has been investing in disproportionate amounts (in developing ERP) on the Cloud in terms of ROI; we are not making Cloud a Religion.”
However currently, Murphy also adds “We does not really push customers to adopt Cloud but rather leaves it to the customer to decide when to deploy Cloud, and how much they want to pay to move to the Cloud.
He says that Epicor always make clear the productivity and innovation benefits that customers and partners can reap from a Cloud version ; however believe that our customers are the experts in their respective industry what they do – whether in Retail, Distribution, Logistics, Services and more.
“We do not pressure them (the customers) but think it is best to leave it to them to decide on the balance on their business growth, expansion and how Cloud can best fit their business strategy – in terms of budget or availability (or lack of) of the technical skills required to maintain on-premise ERP.
So Epicor is conscientious in balancing between what is really hot (in Cloud trends) and how much are our customers are willing to pay for it.”
Anticipated Growth in ERP
The world is currently experiencing a global manufacturing renaissance, especially in America where 80% of Epicor’s annual USD1 billion dollar revenues are derived from.
“Presently, about 8-10% of Epicor’s revenues come from Cloud deployment of our ERP solutions, as compared to on-premise solutions. In three to five years, I expect this percentage to grow to between 30-50%.
The ERP market is also accelerating towards the availability of upgradable and supportive software that can leverage the components of ‘Industry 4.0’.
“Epicor will leverage a range of Azure technologies supporting Industry 4.0 – including Internet of Things (IoT), artificial intelligence (AI), and machine learning (ML) to deliver ready-to-use, right-sized solutions for midmarket manufacturers and distributors,” he ends .
Epicor In Asia
At the moment, the world’s ERP market is estimated to be worth about USD35 billion, of which Epicor command a market share of between 3-4%.
In special reference to the Asia market, Epicor lumps China, HongKong and Malaysia together to collectively contribute to less than 5% of the company’s annual revenues.
Vincent Tang, Senior Director of Sales for Epicor Asia, overseeing 9 office, over 10 countries, says that although Epicor has 73 ERP-related products, only about 3 are selling well in Asia at the moment.
“The 3 products: Epicor ERP contribute over 70%, ISCALA solution targeted for hospitality, Mattec MES product (acquired 5-6 years) under the Industry 4.0 initiative that has already been integrated mainly for the manufacturing industry – such as factories for metal , die casting, automotive, etc,” says Tang.
He also shares on the challenges that Epicor faces in selling in Asia. “For ERP to sell in the diverse Asian market, there is a significant amount of customization to be done. Functions have to be translated into Japanese, Indonesia, or whichever country it is to be sold into. The other customization includes regulatory compliances, tax requirements and more.”
There are also hundreds of mid-sized companies in Asia, and Tang highlights that the main challenge faced by these are the small budget and need to implement in a short period of time . ie. 6-9 months
This is where Epicor’s dual strategy of selling directly and via reseller channel network workds to address the issue.
“For bigger deals that may have multi-site requirments, Epicor Asia sells directly. For smaller deals that may deal with core specialize industries such as printing, or packaging and garment, etc, Epicor leverages its reseller channel network (there are 4 resellers in Malaysia),” said Tang.
The revenue contribution from both sell-strategy are divided evenly at 50-50 in Asia.
Tang ends by sharing about how Epicor’s ERP Cloud is differentiated from other competitor ERP brands.
“Unlike some ERP brands, Epicor provides the same ERP solution on the Cloud and on-premise. This provides a very advantageous interchangeability of 2 deployment methods to customers and this is a huge benefit.”
He explains, “Customers may start off with on-premise, but due to business expansion to overseas branches, decide to deploy the same existing Epicor ERP on the Cloud for these branches. There is no different training requirement because it is the same ERP solution.
Vice-versa, customers may start off with a smaller budget and select Cloud first. When they become bigger and have their own IT department, they can also move on-premise for the very same Cloud ERP that they started off with. The conversion (from on-premise to cloud and vice-versa) is very fast, just within 9 months.”
This is something that is expected to contribute to the growth of the Epicor ERP brand, especially in its partnership with Microsoft Azure, in Asia and also to the other parts of the world.