ERP's (And Why They're Dying)

How Did We Get Here?

Netsuite started in the late 1990’s, founded by Evan Goldberg. Funding the project was not an issue, thanks $120 million from Larry Ellison. After starting in 1998, NetSuite continued to bulk up its CRM and inventory management offerings, until going public in 2007. At this point, the company was valued at around $1.7 billion (finansys ). Around 2012, the company released SuiteCommerce. As online sales increased, so did NetSuite’s focus on going after ecommerce companies.

SAP has a past that goes further back. Its origins date all the way back to 1972 with 5 former IBM employees. By 1975, the system had concepts of invoicing and inventory management. Upon going public in 1988, the company continued to build upon the product, particularly with focus on making it accessible online. They continued to scale and note on their website that there are around 269 million users worldwide.

Microsoft Dynamics began back in 2003, with the launch of their CRM. Interestingly enough, they continued to iterate on the product until they finally launched Dynamics 365 in 2016. This included features such as supply chain management, marketing, finance, and sales. A true ERP with all of the bells and whistles.

These 3 titans paved the way to what we know today as an ERP. A robust system that allows companies to run their businesses effectively. From inventory management, invoicing, and all things finance - there’s a lot to unpack here.

Why Will They Lose Steam?

Ok, I must admit - each of these companies have the resources to pivot and probably won’t go anywhere entirely. Too big and too much available capital.

However, with more accessible education and the emergence of AI - I believe that the ways companies conduct business will become more specialized. And hence - their “ERP’s” will be forced to as well. There has never been such a time where businesses can choose something other than SAP, NetSuite, or Microsoft to run their company on.

It’s a different day, people.

And… Ecommerce?

There’s no denying that the emergence of online shopping, obviously started with the introduction of the internet. Giving way to the emergence of Shopify and other online selling platforms. Think Amazon and every other spot where you window shop from your phone.

It has never been easier to start selling a product (thank you again, Shopify). I can create a logo, website, and list products within an hour or 2. The number of new shops popping up each day is astounding.

As digital commerce has matured, much of these legacy ERP systems have morphed into an expensive/clunky way for ecommerce companies to operate. I’m not saying that they don’t “work”, but they take some serious hand holding (and deep pockets/dev talent).

I believe that we’re building something special at Luminous - striving to be the top option for ecommerce brands, looking for the modern and purpose built ERP specifically for them.