EAM/CMMS Best-of-Breed Vendors Face Threat From Suites

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1 Markets, K. Steenstrup Research Note 12 March 2003 EAM/CMMS Best-of-Breed Vendors Face Threat From Suites They serve a diverse market of global customers, but many vendors in the Enterprise Asset Management/Computerized Maintenance Management System Best-of-Breed Magic Quadrant are struggling for survival in 1Q03. Core Topic ERP II, Supply Chain & Manufacturing: ERP II Strategies, Applications and Technologies Key Issue How will ERP II vendors and markets evolve? This is the first version of a new Magic Quadrant solely assessing this space (see "Asset-Intensive ERP II and EAM/CMM, 1Q03"). The vendors and products in this Magic Quadrant are those that can be applied as best-of-breed maintenance, repair and operations (MRO) materials packages in asset-intensive industries, as well as any industry requiring capital equipment or asset maintenance, including manufacturing, services and facilities operations. As described in previous Magic Quadrants (see "EAM and Asset- Intensive Midmarket ERP II MQ 2Q02"), from late 2001 to mid-2002, these vendors went through a cycle of product updates in functionality and technology that has provided users with more-up-to-date software and expanded functional scope. What had been significant differentiations among products such as Web access, 21 CFR 11 compliance and application service provider (ASP) outsourcing is now mainstream for most vendors. At the same time as the enterprise resource planning (ERP) II suite vendors refreshed or added maintenance functionality, particularly Oracle and J.D. Edwards (see "Asset- Intensive ERP II Suite Vendors Expand Offerings"), the market moved to a more-conservative and risk-averse buying approach (see Figure 1). Gartner Reproduction 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. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 Figure 1 The EAM/CMMS Best of Breed Magic Quadrant 1Q03 Challengers Leaders Ability to Execute Industrial & Financial Systems Mincom Tabware Indus EMPAC Mainsaver Software Ivara ADB Datastream Systems MRO Software Invensys Avantis Indus PassPort Indus InSite As of January 2003 Niche Players Visionaries Completeness of Vision Source: Gartner Research The increased competition and the changed buying characteristics that best-of-breed vendors have encountered are affecting their profitability. Best-of-breed products are not dead, nor are they necessarily more expensive as is the popular opinion in the customer base, which has been partially propagated by the marketing arms of the suite vendors. For example, some vendors can mitigate the costs of a best-of-breed strategy by providing ready-to-use, fixed-price, productized integration; however, many buyers we talk to are looking for single-vendor solutions that provide fewer risks in relationship management and future upgrades. Enterprises interested in single-vendor solutions are even willing to compromise functionality, which may be appropriate for companies using basic run-to-failure and planned maintenance regimes. Many enterprises consider the additional features of predictive and reliability-centered maintenance (RCM) to be the proverbial "sledge hammer to crack a nut." The Leaders MRO Software: The company's Maximo 5.1 software continues its best-of-breed leadership, but MRO had declining revenue in We have previously expressed concern about the rate of adoption for the Web-based v.5.0, but this now appears to have 12 March

3 been overcome. Full technical, language and broad functionality support means that the majority of sales are now of the new version. Although MRO acquired IT asset management company MainControl, this represents a small percentage of overall revenue, and is not yet integrated with Maximo. Enterprises looking for a best-of-breed solution that can be readily integrated with the leading ERP II systems, and which has functionality deeper than what most companies in capital-intensive industries (including manufacturing) need, should short list Maximo. Datastream Systems: Since the release of its Web-centric product, Datastream 7i, Datastream has had high unit sales across many industries, in all geographic regions, and sales are growing again in previously neglected countries. Overall market share of new licenses has improved dramatically, and overall revenue has increased. The dollar value of the sales is, on average, less than that of its competitors; however, the newer version has gained acceptance in the marketplace as a shortlisted product in most evaluations, enabling Datastream to return to consistent profitability. It is well-known and highly regarded in most industries (particularly manufacturing, but not airline operations); however, it is currently only suited to customers using an Oracle database. Customers should also review the vendor's experience in their specific industries. The Challengers Industrial & Financial Systems (IFS): This vendor is normally rated as an ERP II suites provider; however, we have seen sufficient sales of stand-alone enterprise asset management (EAM) to warrant inclusion. The product offers above-average functionality and a strong, componentized, Web-based technology that integrates readily with other business applications. Because IFS doesn't focus on the best-of-breed market, prospective customers should carefully review the level of competency in the local office to deliver and service just part of its suite offering. Although it has a strong presence in North America through its manufacturing suite sales, we have not seen the EAM component offered on a stand-alone basis there. Questions regarding IFS's viability continue to surface with the announcement of missed profit targets at YE02. However, the company has taken cost-containment actions that include moving a major development location from Sweden to Sri Lanka, as well as management changes to sharpen focus (CEO Bengt Nilssen has been replaced by Michael Hallen as CEO in Sweden). In particular, customers in utilities, aviation and transportation with operations in Europe or Asia should short list IFS's product. Customers in other regions should review the local capability for their industries, which varies across IFS offices. 12 March

4 The Visionaries Indus International: InSite is the sole visionary product among the commercially available EAM offerings, and its focus on ease of use with a simplistic Web-based user interface is compelling for many facility-based enterprises, such as hospitals and heathcare organizations. However, there are few reported sales, and it is rarely being considered by Gartner clients in evaluations (Indus declined to provide sales and revenue information by product). InSite has not yet had success reported outside North America and the United Kingdom. InSite is currently at version 2.0. and Indus plans for InSite v.3.0 to be released in mid In late 2003, the vendor plans to release InSite Enterprise Edition, which has the InSite front end coupled with the EMPAC back end and logic. InSite v.2.0 is still only an ASP model, but the Enterprise Edition will have a conventional perpetual license option. Although it was introduced at the same time as Datastream 7i and MRO's Maximo 5, we have not seen nearly the same level of acceptance in the EAM market. Indus continues to put R&D expenditure into the product, but with Indus' revenue declining rapidly, execution becomes crucial for the company. Nonetheless, the product is a good technology base for Indus's plans. The current product will suit enterprises looking for a simple end-user access system, provided the buyer is satisfied with Indus's long-term viability. Buyers looking for a conventional license option will need to wait until a later release. The Niche Players Invensys Avantis: Since the Avantis PRO product was upgraded to version 3.2, sales and interest have increased. The home that Avantis has found in Invensys' Production Management Division works well for vendor and prospects alike. Avantis is being evaluated more frequently in processmanufacturing environments and utilities where its relationship and experience in integrating with Invensys process control systems adds value to clients of both. Similarly, the Windows-like user interface is a strength for some evaluators. The company has added functional richness with two add-on modules in the past year: Avantis.DMM uses real-time data from plant floor systems for maintenance decision support and Avantis.CM provides equipment monitoring as a predictive maintenance extension. The XA (AS/400) product continues to be used; however, most of the activities involve servicing the established customer base. Mincom: Mincom has improved its financial performance in the past year. Although it offers a suite (Ellipse), like IFS, it also packages the EAM modules to strategically market and sell them as best-of-breed offerings to some industries. The system is not 12 March

5 suited to manufacturing environments; however, for such assetintensive industries as mining, utilities, defense and transportation, Ellipse can be implemented economically and reliably in conjunction with ERP II suites from major horizontal ERP II vendors. Tabware: Having been acquired by Assetpoint (which is owned by Integrys), Tabware was in danger of losing its way; however, this hasn't happened. Although product innovation has been limited to update releases of Tabware and those ancillary products including key performance indicators (KPIs) and mobile maintenance access 2002 was a good year for Tabware results, with increased sales to manufacturing enterprises and facilities managers in the United States. Enterprises looking for hosted or delivered software systems to support facilities maintenance at a low acquisition cost should consider Tabware. Indus International EMPAC and PassPort: Poor financial performance, even by current industry standards, is affecting Indus' ability to provide three viable products to the marketplace. As a result of its financial problems (Indus declined to provide sales and revenue information by product), the staff has been deeply cut to stem costs. It's likely that Indus will achieve its stated goal of merging EMPAC and InSite within 12 months, so the current strategy for EMPAC as a stand-alone product lacks future vision, since InSite is the likely internal winner from this merging of technologies being the newer platform. Users of EMPAC should consolidate onto the most-recent release and then consider alternatives when Indus announces them. EMPAC should be considered by new customers only as an interim product in a migration toward the InSite-influenced next merged release. PassPort appears to have a strategic future within Indus and is strongly targeted to the utilities industry, with the defense initiatives resulting in one, halted project that has been blamed for Indus's poor revenue ever since. The utilities focus gained considerable momentum with the announcement of the Indus acquisition of SCT's utilities systems. PassPort is also one of the few packages (Mincom's Ellipse being the other) that can be delivered into IBM's Z series platform. As of r and r.9.1 of PassPort, the IndusConnect extensions increase its integration capabilities with other packages and process control systems. PassPort r.10 is due out early in 2004, and it is likely to be an expanded offering for utilities customers in the United States and Europe. Mainsaver Software: On 24 July 2002, Mainsaver (originally JB Systems) was acquired from Titan/Cayenta by Ameritege 12 March

6 Technology Partners. Although Cayenta included other government and utility-industry-specific functional offerings, as a spin-off company, Mainsaver is now focused purely on EAM requirements. This means that it will continue to be a lower-cost offering that can be readily integrated with a wide variety of ERP II systems. As with many other EAM vendors, an ASP variant is also available and the company is expanding its potential overseas through distributors in the United Kingdom, Malaysia, Australia, Italy, Canada and Mexico. U.S.-based organizations, particularly local government, utility and manufacturing companies, should consider Mainsaver if they're looking for a simpler EAM solution. Ivara: Although substantially smaller than the other vendors evaluated in this Magic Quadrant, Ivara is worth considering because of its unique approaches to EAM. The software core is developed to focus on reliability issues and the RCM disciplines. The company has gradually expanded the functional offering to include procurement and inventory, but the professional services remain an important part of what it can bring to a user. This means that Ivara can offer an agnostic extension to EAM or ERP II as indicated by its recent partnering with SAP. Similar to the Avantis concepts, Ivara EXP collects and analyzes equipment condition data from controls, sensors, data historians and visual inspections. Ivara version 3.0 also offers a built-in integration to OSIsoft's Pi and OPC standard data collection devices. Ivara has recorded sales in utilities, outside of its core interest in steel and mining. North American companies that need a full RCM strategy and service should consider Ivara. ADB: Headquartered in Canada, ADB is a small software company formed through the merger of ADB Systemer and Bid.Com. ADB has made sales to its customer base and new accounts in the past year, and the company's revenue is modest, but improving. ADB's innovative offerings in acquisition through disposal of equipment make it worth considering in its sweet spots of oil and gas for companies (or the public sector) and managing the life cycle of assets. ADB will need to achieve sustained growth and profitability to be ranked alongside the best-of-breed EAM offerings in future Magic Quadrants. Others: There are hundreds of CMMSs and EAM systems on the market. Some come from small vendors offering simple systems for departmental or workshop use only, and they have not been evaluated here because they lack a significant presence or potential in the Gartner client marketplace. Others are very niche-focused on fleet or facilities maintenance, which may be of value if operational, rather than maintenance, issues are a key to success. There are also strong EAM solutions embedded in the ERP II suites of such vendors as Mapics, 12 March

7 Intentia, SAP, J.D. Edwards and Oracle. Although not evaluated here, they should be considered by owners of those suites when comparing the best-of-breed packages assessed in this Magic Quadrant. Acronym Key ASP Application service provider CMMS Computerized maintenance management system EAM Enterprise asset management ERP Enterprise resource planning KPI Key performance indicator MRO Maintenance, repair and operations RCM Reliability-centered maintenance Bottom Line: Questioning long-term vendor viability remains a theme in most customer evaluations, and potential buyers should look at current profitability, as well as a long-term commitment to products and markets. Financial credentials and performance should be reviewed closely when making a strategic purchase decision. For most companies, a shortlist should be drawn up that includes the best-of-breed offerings currently targeting your industry and incumbent enterprise resource planning (ERP) II suites that have an enterprise asset management (EAM) module to offer. 12 March