The Future ERP: Strategic M&A Within Partner Ecosystems

The world of Enterprise Resource Planning (ERP) systems is undergoing a significant transformation. ERP systems have long served as the backbone of businesses. Software vendors like SAP, Oracle, Infor, and Microsoft provide the backend software infrastructure that empowers the modern enterprise. ERP customers have extensively customized these systems and proceeded to maintain the original configuration for decades. However, legacy deployments are now struggling to meet modern business requirements and standards. Consequently, customers are compelled by necessity to migrate to modern platforms on an accelerated timeline.

The most efficient use of time and capital under this shifting set of industry dynamics is strategic M&A focused on either buying modern platform capabilities to meet the industry demand or selling a highly valuable set of customer relationships and support services. This customer base will demand the advanced capabilities of the strategic acquirer and provide a sustainable pipeline. A mutually beneficial path forward for both buyers and sellers will continue to accelerate consolidation in this space. In this article, we break down the contributing factors.

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