Beyond the Market Impact of the events covered in Parts One and Two of this note, Geac Computer Corporation Limited (TSX: GAC) faces serious challenges.
Although it is functionally strong, Geac System21 has until recently lacked some of the technology and buzzword �must haves' such as a web-based, server-centric architecture, XML-based integration and sales force automation (SFA) that have been natively provided by many of its rivals such as SAP, Intentia, IFS and J.D. Edwards. In contrast, Geac products have mostly "talked" to the outside modern collaborative world through a plethora of open APIs (application programming interfaces) and the company has remained content (or forced) to settle for �best-of-breed' connectivity. Additional functional suites like CRM, advanced web-based product configuration management, business intelligence (BI) and so on have been provided largely through partner alliances such as with Cognos, Information Builders, and Business Objects for business intelligence (BI), Applix for its iCRM and interactive planning solution, and with former Frontstep for its SyteLine APS and SyteCenter solutions.
By delivering the above-mentioned native enhancements within System21 Aurora, Geac might partially allay some customers' fears that System 21 functionality will increasingly lag that of its major competitors. Still, the tacit stance Geac has assumed while developing the Aurora enhancements over the last few years has come with a cost of lost mind share and a consequent challenge of putting the product back on prospects' radar screens. In fact, Aurora is a 2nd or 3rd-generation of web-enablement, given the web-based supplier- and customer-facing applications have been available in earlier System21 versions since the late 1990's. This lost mindshare will make selling the product to new customers quite difficult, especially considering a tough selling climate.
Further, Geac will have to also embrace and promote a rock solid strategy for integrating its product suite with multiple partners. The company may benefit from following J.D. Edwards' example and closely partnering with a major enterprise applications integration (EAI) vendor in order to ease integration with its partners. In line with this thinking, Geac already has strong technology partnerships with IBM and Jacada (for hardware and middleware). The Aurora product uses the latest IBM technology, and the dependence on IBM has largely helped Geac curb its development costs while delivering a number of additional modules running on a unified platform.
Still, the process of harmonizing the installed user base across a controllable number of active software versions remains a major challenge. If history helps us predict the future, most contemporary vendors will not be able to pull off a smooth evolution from their current architecture to the next-generation. The problem largely involves the issue of being limited by the past, making it more difficult to truly transition to a new architecture (for more information, see What's Wrong with Application Software? It's the Economics).
It is needless to say that the still varied product portfolio under the Geac banner will inevitably take more pondering and soul-searching and may likely act as a distraction from the primary products' strategy. Geac has already begun to address this matter by divesting a number of less-profitable and non-viable products (see Geac Decomposes To Survive), but it still has a few products running on disparate platforms, from mainframes to web-based architectures.
Having an unfocused, multi-product and multi-technology strategy in markets with diverse dynamics typically multiplies and overstretches sales, R&D, and service & support resources, jeopardizing the products' possible long-term success in their respective niches. This market perception and sentiment is not to be neglected, as some customers feel that Geac essentially treats some venerable products like the M-Series (a.k.a., Millennium, acquired from former McCormack & Dodge) as a cash cow and has long not reinvested significantly in the product's enhancements. At the same time, the support fee is perceived as costly, while the Millennium architecture is unique enough that it is difficult to find resources to support the application independently. Time alone will tell whether the Extensity and Comshare acquisitions and IBM technology overlay will add some major new value atop these applications. At least, the opportunity seems to be there.
Although it is functionally strong, Geac System21 has until recently lacked some of the technology and buzzword �must haves' such as a web-based, server-centric architecture, XML-based integration and sales force automation (SFA) that have been natively provided by many of its rivals such as SAP, Intentia, IFS and J.D. Edwards. In contrast, Geac products have mostly "talked" to the outside modern collaborative world through a plethora of open APIs (application programming interfaces) and the company has remained content (or forced) to settle for �best-of-breed' connectivity. Additional functional suites like CRM, advanced web-based product configuration management, business intelligence (BI) and so on have been provided largely through partner alliances such as with Cognos, Information Builders, and Business Objects for business intelligence (BI), Applix for its iCRM and interactive planning solution, and with former Frontstep for its SyteLine APS and SyteCenter solutions.
By delivering the above-mentioned native enhancements within System21 Aurora, Geac might partially allay some customers' fears that System 21 functionality will increasingly lag that of its major competitors. Still, the tacit stance Geac has assumed while developing the Aurora enhancements over the last few years has come with a cost of lost mind share and a consequent challenge of putting the product back on prospects' radar screens. In fact, Aurora is a 2nd or 3rd-generation of web-enablement, given the web-based supplier- and customer-facing applications have been available in earlier System21 versions since the late 1990's. This lost mindshare will make selling the product to new customers quite difficult, especially considering a tough selling climate.
Further, Geac will have to also embrace and promote a rock solid strategy for integrating its product suite with multiple partners. The company may benefit from following J.D. Edwards' example and closely partnering with a major enterprise applications integration (EAI) vendor in order to ease integration with its partners. In line with this thinking, Geac already has strong technology partnerships with IBM and Jacada (for hardware and middleware). The Aurora product uses the latest IBM technology, and the dependence on IBM has largely helped Geac curb its development costs while delivering a number of additional modules running on a unified platform.
Still, the process of harmonizing the installed user base across a controllable number of active software versions remains a major challenge. If history helps us predict the future, most contemporary vendors will not be able to pull off a smooth evolution from their current architecture to the next-generation. The problem largely involves the issue of being limited by the past, making it more difficult to truly transition to a new architecture (for more information, see What's Wrong with Application Software? It's the Economics).
It is needless to say that the still varied product portfolio under the Geac banner will inevitably take more pondering and soul-searching and may likely act as a distraction from the primary products' strategy. Geac has already begun to address this matter by divesting a number of less-profitable and non-viable products (see Geac Decomposes To Survive), but it still has a few products running on disparate platforms, from mainframes to web-based architectures.
Having an unfocused, multi-product and multi-technology strategy in markets with diverse dynamics typically multiplies and overstretches sales, R&D, and service & support resources, jeopardizing the products' possible long-term success in their respective niches. This market perception and sentiment is not to be neglected, as some customers feel that Geac essentially treats some venerable products like the M-Series (a.k.a., Millennium, acquired from former McCormack & Dodge) as a cash cow and has long not reinvested significantly in the product's enhancements. At the same time, the support fee is perceived as costly, while the Millennium architecture is unique enough that it is difficult to find resources to support the application independently. Time alone will tell whether the Extensity and Comshare acquisitions and IBM technology overlay will add some major new value atop these applications. At least, the opportunity seems to be there.
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