Lawson puts its ERP on Amazon's cloud

The move sparks fresh competition for NetSuite, SAP and other SaaS ERP offerings

Lawson Software announced a partnership on Wednesday that will make its ERP (enterprise resource planning) and other applications available on Amazon Web Services' cloud-computing infrastructure service.

Starting in May, Lawson's S3 Enterprise Management System, M3 Enterprise Management System, and Talent Management application will hit Amazon's cloud.

In addition, Lawson is launching a "test drive" service that will enable customers to try out its software on Amazon for up to two weeks, using "their own business processes and data." Lawson's Smart Office and enterprise search applications are the first available under the test drive offering.

With the Amazon deployment option, customers will be able to quickly set up new application instances or add system capacity during times of high demand, said Jeff Comport, senior vice president of product management. Customers may also wish to set up temporary instances for testing and prototyping, Lawson said.

Lawson is offering a subscription pricing model for Amazon-based applications. In terms of cost, Lawson will strive to stay on par with on-premise licensing, Comport said. The company does not "intend to use pricing on the cloud as a loss leader or to buy market share."

There will be an option to convert subscription licenses to perpetual ones, he added.

Lawson is one of the largest independent ERP vendors after Oracle, SAP, Microsoft and Infor, with US$757 million in revenue during its fiscal 2009 year and 4,500 customers in manufacturing, services and other sectors. The company's partnership with Amazon is evidence that Lawson's target audience is growing comfortable with the idea of SaaS (software as a service), and prefers it in some cases.

"As we look over past couple years of prospects, we can certainly had deals we didn't get where customers wanted full-function ERP, but not the burden of managing [systems]," Comport said.

Lawson's move to the cloud will place it in competition with midmarket SaaS ERP products from NetSuite, Workday and SAP's Business ByDesign, which is headed for a broader rollout later this year.

But Lawson offers specialized ERP functionality, such as capital accounting, whereas competitors are offering "commodity" features, Comport claimed.

While the Amazon deployment model allows for rapid technical implementations, "people-intensive processes" are still required to tune Lawson's software for a particular company's business requirements, Comport added. "The cloud doesn't provide a magic bullet for anyone."

Meanwhile, the test drive service gives users enough time to get a good feel for an application, but admittedly doesn't go as far as a trial implementation, he said. Those will remain available for customers who desire them.

Lawson's cloud strategy is a sound one for the customers it targets, said Ray Wang, partner with the analyst firm Altimeter Group. "Honestly, these are companies that should focus on their business and let the infrastructure go to the lowest-cost provider," he said. "[Amazon] is one of the places."

It's a distinct possibility that Lawson will strike similar deals with other cloud infrastructure vendors, Comport said, but he declined to name names.

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