Business Engine President and CEO John O’Neil offers his view on the direction of the professional services automation (PSA) market, including his take on which players will emerge.

TechRepublic: Five major players emerged in the ERP market before the race to e-business. How do you see the PSA market taking shape?
O’Neil: I think what you’ll see is similar to how the ERP market reacted to CRM. PSA is similar to CRM in that it was an opportunity that the ERP market couldn’t handle. It [CRM market] started out with a hundred different companies and then boiled down to maybe five that made it to the critical mass stage, which further thinned out by two or three of them being bought by ERP players. Then, you have two or three pure-play CRM vendors that are as big as the traditional ERP companies.

TechRepublic: Do you think a dominant Siebel-like player will emerge in the PSA space?
O’Neil: I don’t know if you will see a Siebel-like vendor emerge from the PSA market, but I would bet that the market is big enough and has enough nuances that it is conceivable that you could see one to two large players emerge.
Business Engine was founded in 1984 as Micro-Frame Technologies but officially changed its name to Business Engine in October of 1998 to reflect its flagship product. The company is privately held and has 200 employees in the U.S. and Europe.
TechRepublic: Do you think that PeopleSoft will be able to leverage its position as an ERP vendor to become a contender in the PSA market?
O’Neil: I think that they will. And, what that will do is slow down the purchase decisions with companies that are using PeopleSoft’s HR, but I don’t believe that it will ultimately result in a great deal of money for PeopleSoft because they eventually discount it a lot. If PeopleSoft prices it right, it will be perceived as a simple extension; then the customer will hold off on buying a real tool for a certain number of months. However, if they become unhappy with that approach, then they will reenter the market looking for a solution. This is what we saw in the client-server space when we were competing with the ERP vendors. A company with a significant investment in a particular ERP application would wait before making a decision. They may even try out the solution, but if the product didn’t deliver what they wanted, they will buy a best of breed solution.
TechRepublic: What do you think of the comprehensive suite approach to solutions?
O’Neil: The one-size-fits-all approach is trying to turn a vice into a virtue. I have this behemoth of an architecture. How do I turn it into a product that everyone can use? With XML integration advancing to the next generation and with companies going to the ASP [application service providers] model, companies will not bother doing the integration. There will be ASPs offering best of breed solutions where you can pick five applications and they [ASPs] will do the integration for you.
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