CEO Eyes Turf War

Dutkowsky prepares JDE to defend its midmarket ERP position.

Robert Dutkowsky became president, CEO and chairman of J.D. Edwards & Co. in January. The Denver-based maker of business and enterprise resource planning software is pushing to integrate and upgrade its own applications, as well as those of companies it has acquired, such as customer resource management applications maker YouCentric Inc., which it bought last year. Dutkowsky spoke about JDEs plans with eWeek Executive Editor Stan Gibson and Senior Writer Renee Boucher Ferguson.

eWeek: What is the significance of J.D. Edwards 5, and how is customer acceptance so far?

Dutkowsky: We had our annual Focus user meeting in Denver last month, and there was a tremendous amount of interest in J.D. Edwards 5. Before, we had ERP, CRM, supply chain intelligence, content management and other applications, but it didnt appear to the customer as if the pieces fit together. So, J.D. Edwards 5 put an umbrella over all our software.

eWeek: Does it create an umbrella through technology or through a clearer message?

Dutkowsky: Its both. The technology has been there in the past. CRM was integrated with ERP. Our advanced planning application was integrated with our manufacturing and distribution applications. But the way we talked about the products, it didnt appear as if they were integrated.

eWeek: Could you explain your application integration strategy?

Dutkowsky: We use a product that we license from WebMethods [Inc.] called XPI [Extended Process Integration]. We can use it to take J.D. Edwards and non-J.D. Edwards applications and interface them with existing applications. We also have XBPs [Extended Business Processes], which are business practices that are about how the technologies help the business processes run. As we move into the fall, you will see continuing enhancements on the XPI front and additions to the XBP library for vertical markets.

eWeek: What is your strategy for dealing with Web services?

Dutkowsky: J.D. Edwards 5 will be the architecture that embodies our Web services strategy. Web services are clearly going to be important in the future of application development and deployment. Today, they are a nice idea, but the thing thats missing is the deployment of standards. Inside J.D. Edwards 5, were using Web services, so that when Web services become more standard, well have architected the applications to work with them.

eWeek: How do you view Microsoft Corp.s .Net?

Dutkowsky: .Net is a very interesting architecture to build your core applications around. We continue to look closely at .Net, and we deploy it in some applications.

eWeek: So you havent embraced it for all applications?

Dutkowsky: No. Not only is .Net interesting, but so is WebSphere and the [architecture] that Sun [Microsystems Inc.] announced. Today, we are pilot testing all three, but we havent picked one as a standard yet.

eWeek: Whats your view of the Microsoft-Great Plains strategy?

Dutkowsky: Microsoft is an important partner of ours. Microsoft is one of these companies that we have to cooperate with and compete against. However, Great Plains and Navision [A/S] applications sit below J.D. Edwards target markets. Were targeting the midrange and midcap business space—companies with $200 million and up in sales. Our primary competitors are SAP AG, Oracle [Corp.] and PeopleSoft [Inc.]. Microsofts business model is selling shrink-wrapped software. Our revenues are 25 percent software and 75 percent implementation services and support. We and our partners add tremendous value and customization.

eWeek: If Microsoft moves into your markets, how will you compete with them?

Dutkowsky: CIOs dont think of Microsoft as an application provider. They dont think of them in the same light as J.D. Edwards, SAP or PeopleSoft. Our answer is to continue to bring out products that are heavily clothed with service and support offerings and have the capability to make the customers business more competitive.

eWeek: SAP is going after the midmarket. It could be a formidable competitor. How will you respond?

Dutkowsky: I think SAP announced its fifth initiative to attack the midmarket in the last five years. I was an SAP customer at GenRad [Inc.]. SAP has a great set of products, but they are far too complex, too inflexible and far too expensive for a midmarket customer. On the other hand, J.D. Edwards products were designed for the midmarket and have been deployed there for 25 years. Thats our space.

eWeek: Do World customers need to move to OneWorld to take advantage of new technologies such as CRM, SCM [supply chain management] or Web services?

Dutkowsky: No. We announced the support and integration of CRM and [SCM] and Advanced Planning Solution in the World product already. Weve said that in the next two years, were going to introduce more new functionality than we ever have in any two years in our history. Youll see us attempt to announce small, meaningful additions to J.D. Edwards 5 every month. [Last week,] we announced Demand Planning 4.0 with our partner Demantra [Inc.]. It links very tightly with our demand consensus applications. It adds more information than before from the CRM side.

eWeek: Are acquisitions part of your strategy?

Dutkowsky: We have $350 million in cash and equities, so we have a war chest for acquisitions. But we have also increased research and development investment from 11 percent of sales to 14 percent of sales. ERP 8.0 was organically developed. The demand planning announcement was developed in partnership with Demantra. With the acquisition of YouCentric and Numetrix, weve shown we have the stomach to make large acquisitions. Well stay competitive in all three arenas.