Apps Dominate Outsourcing Requirements

If you're looking for evidence that the markets for ERP and other packaged applications appear to be improving, check out SAP's recent earnings report. Despite a slight decline in worldwide sales, revenue for the third quarter was up 35 percent year-over-year. Systems integrators are clearly benefiting from the renewed growth in applications spending.

This year alone, customers such as Delphi Automotive, Sprint, JP MorganChase and the California State Automobile Association have brought in solution providers to handle new ERP or CRM implementations and/or management.

Currently, 37 percent outsource the hosting of their applications, according to AMR Research, while slightly less than 30 percent outsource app development and management. The pipeline for the coming year finds that 7 percent plans to outsource their hosting and development, and a similar amount plans to do so within 24 months.

Down the pike, there's still business to be had. Look for Avon to issue an RFP next quarter for a global implementation of JD Edwards applications, says CIO Harriet Edelman. She will be seeking a partner to roll out the apps, she says.

Even those that have ERP solutions look to solution providers for other services. Case in point: Like Dial, Delphi Automotive retained HP Services for an SAP integration project earlier this year. Both customers have tapped their respective integrators for data-center hosting and storage services.++