Enterprise resource planning (ERP) products are now big moneymakers, as businesses from enterprise giants to small and midsize players attempt to solidify not only what they spend, but how they spend it. The Sage Group, creators of the Sage 200 application, recently announced they would be following the trend and putting their Sage ERP offering into the cloud. And they intend to do it using Microsoft Azure.

First!

What's interesting about the Sage move, according to an article at ComputerWorld, is that it represents another step forward in the world of "co-opetition," where large companies both cooperate with each other and compete in the same market space. It's a strangely inevitable result of the cloud--with open source software and platforms quickly becoming the norm, fewer and fewer propritary technology niches are left, even to big name brands.

The Sage ERP, which incorporates a number of Microsoft technologies, will be released for Azure in the next year, while Microsoft's ERP, Dynamics, is also going to sell through Azure. As customer interest in ERP software grows, companies have been forced, often quickly, to define a software strategy that allows growth in an unsure market. Hitching their cart to the Azure horse makes sense for Sage, and it's likely they'll team up with a number of platform-as-a-service (PaaS) providers, according to Forrester Research analyst China Martens. But will that diversification be enough to guarantee a market share?

We Need a Plan!

A recent Digital Journal press release detailed the findings of an IDG Research Services Group survey about ERP projects that discovered that only 27 percent of all IT pros surveyed considered their organization's ERP efforts "very successful." While many of the issues with ERP came as a result of human factors (46 percent of IT managers said it was difficult to get the people they needed in place quickly), 44 percent said that their ERP software came with "less system functionality than defined in original project scope." They went on to say that this in turn became an average cost overrun of 15 percent of their total budget.

What do the numbers mean? That IT pros will be more carefully examining ERP offerings on the market before they make a choice. And they will be looking not just for an offering that is feature-complete, but one that isn't as technically demanding or nuanced as other systems they use, at least until they have enough IT staff trained in ERP use.

For midsize IT, there are two takeaways when looking at the Sage ERP move. One is that this kind of "co-opetition" helps to standardize the industry, something that will only benefit enterprise resource planning initiatives. However, it's worth paying attention to just how standardized these systems may become--the more big players move to clouds like Microsoft's Azure, the more they start to look just like Microsoft, and once vendor choice exits a market, quality tends to drop. ERP is here to stay, and Sage thinks they've got the best chance as part of Azure; hopefully, their own planning strategy doesn't lead them astray.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. Like us on Facebook. Follow us on Twitter.