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With industry giants like SAP pushing deeper into the enterprise resource planning midmarket, Vormittag Associates Inc. has moved to broaden its reach with smaller customers by partnering with Berbee Information Networks. The deal, inked on July 24, could potentially lead to VAIs S2K software being distributed through CDWs catalog, and as a hosted application for Berbees data center customers.
While SAP recently beat the drum about its forthcoming midmarket product, code-named A1S, including its availability as an “on-demand” service, VAI and Berbee are focusing initially on a much more tried-and-true delivery vehicle for smaller businesses: in a hardware-software bundle with low-cost IBM System i servers.
The deal initially will bundle the S2K ERP software with IBM 515 server hardware, to be sold through Berbees IBM systems group. “Were initially targeting 3,000 SMB [small and midsize business] customers with the bundle,” said Michael Grone, the System i product manager for Berbee, headquartered in Madison, Wis. “Were focusing on the low end to medium-sized SMB customer base.”
Grone also acknowledged that a software-as-a-service or managed service offering of VAIs software was also under consideration. “Obviously, [SAAS] is someplace wed like to go. Its not something were doing right out of the chute.” But, he added, the software would be available to Berbees existing hosting customers as a managed service if requested.
Berbee, which was acquired by CDW in September 2006, is currently being run as a separate subsidiary company, Grone said. But as the company is further integrated into CDW, he said, “the long term goal is to get [the bundle] into the CDW model.” That includes extending Berbees reach from its current 4,000 customers to CDWs over 350,000 customers.
“Were hoping that CDW has the reach to get us new business,” said Dan Bivona, sales director of VAI, based in New York. “Were not sure if were going to get in their catalog yet, but it should get us more attention [from potential customers].”
Currently, VAI has about 850 ERP customers, according to Bivona—only a small fraction of which are using it as a hosted application through VAIs existing partners. “We have maybe a dozen customers doing it that way now,” he said.
Aberdeen Group Vice President Cindy Jutras expressed skepticism about whether anyone would ever buy an ERP package out of a catalog. But she said that while getting a software and server bundle into CDWs catalog might not result in many direct sales, it might help VAI get considered by customers who would have otherwise never heard of the company.
“Were starting to see people doing more online research, and downloading demos on their own without [talking directly to vendors], at their own pace,” Jutras said. “In the past, they would contact a lot of ERP vendors, and then work it down to a short list of options. Now companies are working it down to the shortlist themselves. Now, does anyone believe that someone is going to buy something online? Not really. But it might be a starting point.”