For the last two months, PeopleSoft's acquisition of JD Edwards and Oracle's battle for PeopleSoft have been big news.

Less noticed was the sale in April of Baan to SSA.

Meanwhile, Made2Manage, another enterprise resource planning (ERP) company with a strong presence among Tier II manufacturers, decided to go from a public to private company. In addition, Epicor announced last month it had acquired ROI Systems and a warehouse management suite from TDC Solutions.

All of this is taking place against a market that has struggled for some time, but may be poised to rebound, according to John Moore, vice president and general manager, ARC Advisory Group (781-471-1100).

After revenues for ERP declined about 1% in 2002 to $8.9 billion, ARC is forecasting a 5.8% compounded annual growth rate to $11.9 billion by 2007.

The largest percentage of that growth will come from mid-market Tier II companies, and from services contracts. In fact, mid-market ERP users now account for the highest percentage of ERP revenues, with 41% of the market in 2002.

'Tier II companies have been patching their systems for years,' says Moore. 'They are going to have to re-place those systems to remain competitive, and they're going to want to work with an ERP supplier that can provide a complete supply chain solution and the services to support it.'

More action like PeopleSoft/Oracle/JD Edwards is sure to follow, as the long-awaited consolidation of supply chain management players gets underway, says Moore.

'There are far too many suppliers to remain sustainable in this market,' he adds. 'Consolidation is long overdue.'

Not only does Moore expect more companies to be gobbled up, especially in the mid-tier, he believes consolidation is a good thing, both for the industry and for users.

'The uncertainty is going to be tough for users initially,' he says.

'But in the long run, customers will get better products, better support and healthier suppliers.'