Back in BlackBaan has returned to respectability, and the reasons why are instructiveYou could hardly find a more interesting example of a company with nine lives and counting than Baan. Why? Because when you've finished reading about why this enterprise applications contender was left for dead just two years ago, you'll barely believe that it's still alive and kicking. More important, you'll see that Baan has returned to viability largely by avoiding a mistake of many other enterprise software companies: putting marketing plans that have no objective connection to reality ahead of solving real-world customer problems. Cradle to GraveImagine, if you will, a software company facing a hostile investment community on the heels of financial scandal, with a clutter of stand-alone products that would make a Jackson Pollock painting look coherent, and operating in a customer environment where nobody wants those kinds of products any more anyway. Now imagine that two years later, that company is profitable (and became so six months ahead of schedule), has a lucid technology strategy, and has sold its most important customer on a massive upgrade. It really happened to Baan. First of all, you have to appreciate the mess Baan was in when Invensys plc, an industrial controls company, acquired it for a song in 2000. In the early 1990s, the company's founders, the colorful and (it should be said) visionary Baan brothers, gave SAP all the competition it could handle in the booming enterprise software market. But by 2000, a series of poorly executed acquisitions and the brothers' financial shenanigans had destroyed Baan's credibility among customers and investors, forcing the company to seek a buyer. The company was finished, or so it seemed. After a rocky acquisition, Invensys went to work immediately to cut costs (while keeping the development team mostly intact), rationalize and integrate the elaborate Baan product line, focus on growth markets, and update Baan technology to solve real problems in manufacturing, such as the lack of process visibility on the shop floor and an overall inability to move information among closed systems. It has largely succeeded. Today, the iBaan Enterprise product suite, which long-time customer Boeing endorsed via a 31,000-seat upgrade, finally extends the Baan ERP platform with CRM, supply chain management, and product life-cycle management modules, with the XML-enabled OpenWorld integration layer providing a viable enterprise backbone. (One of Baan's new mantras is, "Do not change what you have," executive Ernie Eichenbaum told me.) Furthermore, the company is focused on enabling demand-driven "production management" in vertical industries such as aerospace, auto manufacturing, and electronics, in which it's highly experienced in competing. And although new engagements are hard to come by for any software company these days, Baan already has 15,000 customers. Even so, the ending may not be a happy one. Commenting for a 2000 Intelligent Enterprise news story about the Invensys acquisition, AMR Research's Jim Shepherd called Baan "dead" in the U.S. market ("End of the Line," News & Analysis, Aug. 18, 2000). Now, two years later, Bruce Richardson of AMR Research gives Invensys credit for returning Baan to respectability, but he thinks the company still has too many products and isn't confident that new customers will have the "stomach or budget" for new ERP projects, even those that replace legacy deadweight with more viable "ERP II" systems. Similarly, Joshua Greenbaum of Enterprise Applications Consulting has largely dropped his coverage of Baan because he doesn't consider the company a player in the U.S. market anymore. Trip to Bountiful?While Baan was in crisis, its parent company did all the right things: Listening carefully to customers and focusing on its strengths. There's still a long way to go, but whatever Baan's destination, the voyage is sure to be interesting.
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