Companies report growing demand for hosted e-biz apps

InfoWorld - Although the sagging economy has taken a harsh toll on some e-business vendors, some traditional enterprise resource planning (ERP) vendors have found that the hosted e-business application market is growing.

The impetus appears to be that users are moving to lower-cost options as opposed to managing and maintaining their own software.

Oracle Corp. is scheduled to announce Wednesday increasing market momentum in its E-Business Suite, with 90% of its online e-business customers renewing their subscriptions, according to company officials.

Joe King, vice president of Oracle.com, said the company's online offerings have been boosted by the recent expansion of its sales and support teams outside of North America into Asia and Latin America. In addition, the ailing economy has prompted companies to move to squeeze the most value from their investments, he said.

"Customers are being prudent and looking at how can they get the most for their dollar," King said. "A high percentage of those customers are also continually adding components of the suite as they are renewing. They want reliability [and] predictability, and they want their business processes covered by the best set of applications. It gives the customer the ability to automate their process rather than acquire point solutions and pay someone to make them work."

For example, John I. Haas Inc., a Washington-based hops producer, went live on hosted modules from Oracle E-Business Suite in June. The company is running Oracle financials, order management, processing manufacturing, procurement and manufacturing intelligence applications.

The primary factor in the company's decision to use hosted versions of the software was cost, said Kyle Lambert, vice president of information solutions at Haas.

"It was actually a 20% cut in our Oracle application costs," Lambert said. The company has saved in database administration costs, consulting costs and software maintenance agreements, he said. In addition, Haas has bumped up employee productivity by allowing employees to focus on core job requirements and not the applications.

The move was especially beneficial to the 20% of the company's employees who work remotely and the 10% who are regular "road warriors," Lambert said. Access for remote workers, many of whom have low bandwidth, has been eased by the move to hosted applications. In addition, road warriors can more easily access data from the road.

Joe Marino, an analyst at Current Analysis Inc. in Sterling Va., said it's difficult to ascertain which companies are gaining the most market share in the hosted e-business applications arena. But he said that ERP companies have staying power because of revenues from other