TomorrowNow troubles disguise upbeat ERP support market

TomorrowNow troubles disguise upbeat ERP support market

Analyst claims healthy demand for third-party application help

The problems swirling around SAP subsidiary TomorrowNow could lead to a sale of the company but the third-party application support sector it helped pioneer remains upbeat, maintains a leading analyst.

On 19 November, SAP issued a statement saying that TomorrowNow chief executive Andrew Nelson and several other senior managers had resigned, and that SAP is “considering several options for the future of the TomorrowNow business, including possible sale”. The announcements came in the wake of an ongoing legal case with Oracle over TomorrowNow staff allegedly downloading certain customer-support documents. The affair may have led SAP to fear damage to its reputation among customers.

TomorrowNow supports PeopleSoft, JD Edwards and Siebel software installations, arguing that it can provide a better-value support service than Oracle, the owner of those programs. The firm’s attractions were enough for TomorrowNow to be acquired by SAP in January 2005, and for it to set up local support centres in London and Amsterdam. In an interview last December, TomorrowNow’s Nelson said that the firm planned to add support for more application suites, including Baan, and added that the company wanted to be the “emergency support team” for ERP users.

Despite the current woes, Forrester Research analyst Ray Wang said that TomorrowNow’s problems do not reflect on the sector as a whole.

It is “too early to call the death of third-party maintenance”, wrote Wang in an email, adding that ERP maintenance “remains a huge pain point for customers”.

Wang said the market had been healthy enough for TomorrowNow to grow to about 150 employees and 300 customers, and was strong enough to accommodate a 50-customer rival in the form of Rimini Street, set up by a former TomorrowNow executive. Chinese services firms could also pop up as alternatives, he predicted.

However, UK Oracle User Group chairman Ronan Miles said he was unsurprised by SAP saying it might jettison TomorrowNow.

“The path of JD Edwards [in being acquired by PeopleSoft and then subsumed by PeopleSoft’s sale to Oracle] caused a number of customers to look at TomorrowNow but in the end they didn’t jump,” Miles said. “Oracle did a ‘good enough’ job in calming the customer base and the customer base was in a position to give the whole acquisition path time to settle down.”