Software giant broadens its approach

By ADAM GIFFORD

Software maker JD Edwards has turned its back on the "complete integration" philosophy that has driven the big ERP (Enterprise Resource Planning) application vendors for the past decade,

"We call it freedom to choose," said David Batkin, the New Zealand manager for the Denver-based company, which has now joined the "best of breed" camp.

He said customers would see the difference in the next upgrade of the company's core software, One World Xe (Extended Enterprise), due to go on sale here on September 16.

Fisher and Paykel and meat company Richmond have been running on One World Xe since June.

"What we've done is taken the intellectual property from two recent acquisitions and embedded them in the product in a way which changes our direction," he said.

The acquisitions were Active Software, which made an EAI (Enterprise Application Integration) tool that allows companies to integrate the applications they have within their organisation, and Netfish, a technology that allows companies to integrate those internal applications across the internet with other businesses' applications.

"JD Edwards was traditionally fully integrated," Mr Batkin said. "Our software was wide and functionally rich and we advised clients to buy fully integrated applications.

"Over the past couple of years companies like Oberon and Viewlocity have come along with EAI tools which allow you to integrate new applications to your financials or legacy systems - if you want to buy a CRM (Customer Relationship Management) system which is not integrated, you can do it yourself."

JD Edwards has worked with Viewlocity at Owens Group, where it was used to pull a number of applications together, and with Oberon at Northern Steel, where the JD Edwards system was tied into a Manugistics supply chain optimisation product.

Mr Batkin said customers were moving to collaborative commerce.

"We are saying we don't necessarily have the best ideas in every area. You might want to take someone else's idea, so we will let you do that.

"We won't write the next best CRM system, we acknowledge that. So we formed a relationship with Siebel and integrated their product with ours."

The changes JD Edwards is making are reflected in its results.

Mr Batkin said the third quarter result was one of the best ever, and the final quarter, always a strong one, looked set to be a record.

Over half the third quarter, deals were for more than $US1 million ($NZ2.34 million), marking a significant change in average fee.

There were also many significant supply chain deals building on the Numetrix product the company bought last year.

License fee revenue was 56 per cent up on the same period last year at $116.7 million. Services revenue was $144.4 million, compared to $157.1 million in 1999.

Net income from normalised operations was $2.3 million, or 2c a share, compared with a net loss from normalised operations of $7.2 million, or 7c a share, in the same period of last year.

Mr Batkin said that so far this year the company had signed six sites, most recently a financials and procurement package for Nelson-Marlborough Health.