Establishing Standards for Business Components

Establishing Standards for Business Components

Klaus Turowski (Otto-von-Guericke-University Magdeburg, Germany)
DOI: 10.4018/978-1-878289-70-4.ch009
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Abstract

The field of business applications encompassing software for production planning or order management is dominated by some big vendors offering large standardized off-the-shelf application systems, e.g. SAP R/3, BAAN IV, or Oracle Applications. Despite all advantages of selling and buying these large integrated application systems, there are two major shortcomings: Usually only large enterprises can afford to buy, install, customize, and maintain these systems, and the complexity which is inherent to these still growing systems makes it harder and harder for vendors to enlarge and maintain them. Furthermore, markets for these large packaged application systems are almost saturated, because most of the large enterprises have covered their demand. On the other side, there are lots of small and medium enterprises (SME), which demand very specialized application systems together with a broad coverage of common business functionality, as the core of the related business tasks stay the same—independent from a company’s size. However, nearly no SME can afford to purchase or even to maintain these large packaged application systems. This leads to two important problems: SMEs demand on business application systems can not be satisfied, and vendors of large standardized off-the-shelf application systems lose an important market. In addition, small and medium vendors of business application systems, which offer highly specialized applications, have to master high barriers to entry the software market, as they have to offer core business functionality as well, in order to sell their specialized products.

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