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Baan plots component future

The European enterprise software company unveils a new component architecture for its Baan IV product and outlines its latest acquisitions.

    BOSTON-- Baan, an European enterprise software company, unveiled a new component architecture for its Baan IV product and outlined the company's latest acquisitions yesterday.

    President Jan Baan led a group of company executives here in announcing a new component architecture strategy that will not only ease the integration of Bann's software with other products, but also increase its performance, they claim.

    The first components will be shipped with the company's next-generation applications package, Baan V, which will be released during the first half of 1998, according to the company. The new strategy includes breaking the Baan application into components. It also includes new technology called BOIs (Business Object Interfaces) and the XMA (eXtended Middleware Architecture), which combine to build a framework for linking both Baan components and third-party products.

    BOIs are application interfaces that enable integration of various components. Baan is grouping the BOIs into application-specific categories such as human resource management, warehouse management, and plant maintenance.

    XMA is a Baan developed framework that allows communication between different components and third-party products by acting as a buffer between the different component and middleware. The framework opens up Baan's applications to DCOM- (Distributed Component Object Model) and CORBA- (Common Object Request Broker Architecture) compliant applications.

    Dennis Byron, an analyst with International Data Corporation, said the component architecture debut was the hidden news of the day. "The advantages of this is that it will give Baan V double the functionality of Baan IV and use less source code."

    The company also said the new architecture will let users integrate applications into their enterprise gradually and extend their system beyond the scope of the traditional ERP framework.

    In business news, Baan representatives said its subsidiary Aurum will acquire the Denmark-based interactive selling and sales configuration applications maker Beologic S/A and the Netherlands-based sales automation provider Matrix Holding BV. Both acquisitions will be completed by the end of the month. The terms of the purchases were not disclosed.

    The acquisitions will complete what will become Baan's full configuration front office package--Aurum Interactive Selling Solution--for the CIS (customer interaction services) market, according to company representatives. Beologic will provide the needs analysis tools and configuration engine, while Matrix will provide the sales and service support for the suite. CIS is one of the segments of the enterprise market Baan has targeted as a growth area for its software.

    The company also introduced a family of products for supply-chain planning which builds on recently acquired technology from Berclain Software. The Baan SYNC series links transaction-based ERP (Enterprise Resource Planning) and planing engines which use calculations to manage resource optimization. The enhancement is scheduled to ship with Baan IV early next year.

    Baan hailed the acquisitions and explained that the companies will become part of the "Baan Web," the name for the growing group of partners, consultants, and newly bought companies that will build on and support his company's core enterprise software package.

    "We expect to create a web (worth billions) of dollars by the year 2000," he said, referring to the small industry that's needed to support the Baan offering.

    The global market for enterprise applications is estimated to be worth $15 billion this year and is expected to rise to $20 billion by 2000, according to analysts' estimates. The market's growth is fueled by the trend for companies to buy prewritten software that can be tailored to their own needs, rather than cobbling together their own management information systems.

    Sales also are being buoyed by a shift from old mainframe-based computer systems to client-server systems that distribute processing power among a company's employees. Baan and its main competitors--SAP, Oracle, and PeopleSoft--are all plucking the fruits of this lucrative market.

    Baan's revenues rose 79 percent, to $388 million, in 1996 while its net profit more than doubled, to $36.3 million. Its expansion continued in the third quarter of this year, as revenues climbed 65 percent, to $173 million, and the net profit again roughly doubled, to $18.3 million.

    Baan said one of the keys to his company's success is delivering a product that is less complex, easier, and faster to set up. "We have a product that is quicker and costs less money to implement now."

    Reuters contributed to this report.