February 19, 2001 -- Executives from J.D. Edwards have clarified published reports from CNET.com and META Group last week in which it was stated that JDE had given up on its Application Service Provider (ASP) efforts. The company has directed ASP opportunities to partners, but the company announced the discontinuation last October, and not last week, as many were led to believe by the reports.
Dee Kellogg, director of ASP Solutions for JDE, said the company made the switch in order to focus on its strengths. In a release from October that outlined the company's reasons for departing from the ASP model, JDE cited a forecast by Gartner Group that as many as 60 percent of ASPs would be out of business by 2002. Kellogg said, We felt that we could do a better job being very focused with our indirect channel, and to be able to do collaboration and alliances with our partners, and to be able to afford our customers the freedom to choose the type of delivery they want with our solutions. The report from Gartner also forecast that other Enterprise Resource Planning suppliers will follow J.D. Edward's lead in focusing their efforts.
Kellogg said allegations that J.D. Edwards was withdrawing from the ASP marketplace are wholly inaccurate. We're growing tremendously. She stated, Several months ago, we went from 60 customers to 157 customers, since we have gotten focused on our indirect channel. From 3,000 users to 11,000 users and growing. We went from 15 partners to 22 partners, and we have a nice pipeline to sign on new partners.
There are a lot of people who want to be in the ASP segment, and we're very careful and selective on the partnerships we put together. We feel like less is more, and we want to make sure that after this consolidation that will occur in the ASP market we have partners that are left standing and are strong.
Although the CNET article described the company as a stumbling software maker, both the Gartner analysis from October and the META Group reaction last week painted the move in a more positive light. Gartner said that enterprises should not view this pullback by J.D. Edwards as failure so much as swift learning and action taken to head off the consequences of being spread too thin. The META Group analysis stated the decision makes good business sense, pointing out that ASP offerings such as Oracle have never provided hosting internally, but always depended on partners.