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We Don't Dig Software Biz
[April 28, 2008]

We Don't Dig Software Biz

(Information Week Via Acquire Media NewsEdge) Caterpillar is looking to end its support for the software system it licenses to its dealers to help them run their businesses. The multibillion-dollar heavy machinery manufacturer has been quietly encouraging its dealer channel to look for alternatives to its aging Dealer Business System and is planning to transfer support for the hosted version of the software to consulting firm Accenture, according to a source at a major U.S. dealer who has seen the letter advising of Caterpillar's change of strategy.

Still, Caterpillar isn't presenting this as a done deal. The manufacturer says it will continue to support DBS if enough dealers ask it to. Caterpillar declined to comment for this story, referring to the subject as "an internal matter."

The fact that Caterpillar is advising its dealers to look for alternatives to DBS is a significant shift. Caterpillar never required dealers to use DBS, say sources, but it was a de facto standard for doing business with the company. The majority of the 50 or so Caterpillar dealers in North America use some version of DBS, as do about half the 200 or so in the rest of the world.

Caterpillar has two versions of DBS. The original, introduced in the 1990s, is an AS/400-based, green-screen system with modules for order processing, parts inventory, service, rental, and equipment management. In 2002, Caterpillar introduced an alternative called DBSi, a platform of base functionality with which dealers could integrate best-of-breed applications such as SAP's financials. But DBSi proved difficult and resource intensive to maintain, and Caterpillar suspended development in 2006. Last year, it reintroduced a slimmed-down version, DBSi 5.0, that works with only select applications, such as the financial package from Coda.

Some Caterpillar dealers have been seeking alternatives to DBS for a while. Lawson Software said in February that Finning International, the world's largest Caterpillar dealer, had signed to use its M3 enterprise management system to replace DBS. The Finning deal had been in the works since March 2007, says Julian Archer, a Lawson marketing director, who notes that he's seen a jump in interest from Caterpillar dealers.

Empire Southwest, a Caterpillar dealer that services Arizona and parts of Southern California, uses DBS but probably won't be looking for an alternative any time soon, support analyst John Dillon says. That's because Empire has customized the system considerably, aided by the fact that Caterpillar supplies the software's source code. Dillon hopes Caterpillar sells DBS to a third party, such as Accenture, or that a consortium of Caterpillar dealers takes ownership of it. Dillon says he doesn't blame Caterpillar for wanting to get out of the software business: "It's a pain in the ass."

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