Digital transformation strategist - Odoo Partner - SAP consultant- Board Member - Community organizer
Explained: The 3 Tiers of the ERP Market When we talk about ERP systems, we talk about companies that are making multiple billions of dollars per year to startups that are in the infancy phase. Generally speaking, the ERP market is categorized into three tiers. These tiers reflect the size of their client base, their business process coverage, and the price points of the software solutions. Let’s break them down: 1️⃣ Tier 1: SAP 💲 Market Share: SAP leads the Tier 1 ERP category by far, almost in a monopolistic fashion. Though other ERP vendors are growing and trying to benefit from the ECC to S4 migration hesitancy, SAP is still by far the first in ERP market. Global Revenue: SAP's global revenue was €30 billion (2023). Business Process Coverage: SAP covers virtually all business processes, including advanced solutions in business intelligence. AI Capabilities: SAP leverages AI through its SAP Leonardo platform and the agent Joule. Top Clients: Coca-Cola, Adidas, Porsche. 2️⃣ Tier 2 ERP: Microsoft Dynamics, Netsuite, Workday, Epicor Market Share: These ERP solutions hold a significant portion of the mid-market, serving companies with more complex needs than Tier 3 solutions but with a smaller budget than Tier 1. Global Revenue: For instance, Microsoft Dynamics generated $5.44 billion in fiscal year 2023, while Netsuite brought in $1 billion in Q4 FY 2025. Business Process Coverage: Tier 2 ERPs typically cover financials, CRM, HRM, and manufacturing, with country & industry-specific solutions AI tools: Copilot for MS Dynamics, SuiteScript of NetSuite AI Top Clients: HP, Ford Motor, L'Oréal 3️⃣ Tier 3 ERP: Zoho, Odoo, Market Share: Small to mid-sized businesses, providing solutions at a lower cost with essential ERP capabilities. Global Revenue: Odoo's revenue was $650 million in 2024 with 11k customers. Zoho's ERP solution also has a growing share of the market with solid traction among small businesses. Business Process Coverage: These solutions cover core functions like accounting, CRM, and inventory management but may lack depth in advanced manufacturing or large-scale logistics. AI Capabilities: Odoo has recently launched its AI application that will be fully available in Odoo v19. Top Clients: Odoo counts Toyota, Danone, and Herman Miller as part of its growing client base. The business case for Odoo: Odoo has been positioned in Tier 3 historically & is now climbing into the Tier 2 category due to its impressive growth and rapidly expanding business process coverage. At ERP Happy, we have chosen to partner with Odoo because it provides functionalities of a Tier 2 ERP with Tier 3's flexibility & cost-effectiveness. And as a company, we offer Tier 1 ERP implementation expertise. Midsize businesses (up to 500 employees and/or a 5-50 million $ annual revenue) can fully leverage Odoo thanks to the variety & depth of business applications it provides today. #ERP #Odoo #DigitalTransformation #ERPHappy #SAP
This is good analysis, but having been a Zoho Partner for 8 years, I strongly disagree that you can put it at the same level as Odoo when we are talking ERP capabilities. Odoo is an ERP. Zoho is not. Odoo has a single relational database, Zoho is multiple silos. Zoho cannot even do BOMs, how can you consider it an ERP? Zoho does not have multi-company capabilities, multi-currency capabilities - I have seen too many cases of people trying to use a CRM as an ERP... they all end the same way. Zoho is fantastic at many things, particularly out of the box, such as Analytics. But, if you insist on inserting Zoho in this pyramid as an ERP player, it would need to be in tier 7 or 8. If you feel you've outgrown Zoho and are ready to use an actual ERP, feel free to reach out. My team and I can gladly help you migrate to Odoo. #zohodoo
ERP tiers do not really mean a thing, it is about business needs and requirements to decide what software is really needed. Just because your company maybe in that tier 1 level of revenue, you maybe pretty straightforward and vice versa you could have a lower turnover but complex requirements. Don't think tiers or flashy marketing material think people, process, requirements, then software.
What about Oracle ERP… also, outside SAP and Oracle (which for the most part, are probably the only 2 for very large complex multi global buisnesses) any of the ‘tier 2’ systems can be implemented to work for the majority of use cases. There are a number of great products and ultimately it will come down to how well the system was scoped out and implemented along with having a great service partner.
Thanks for sharing, Diogène
We participate in implementations of SAP, Microsoft, and Zoho, some of our customers leaved Odoo, and our people personally implemented Oracle and PeopleSoft. From our experience, wecan confidently say there are ERPs suited for every company size and need. Ultimately, the choice should be based on Total Cost of Ownership (TCO) and financial capacity, ideally guided by a proper value engineering assessment. At the extremes, a large enterprise is unlikely to run its ERP on Zoho or Odoo, just as a small business probably won’t adopt SAP, both would sit at opposite ends of the TCO spectrum.
Thanks for sharing, Diogène! Very well explained
🤓 interesting topic!
Your Dynamics 365 F&O problem solvers
2moThere are a few inaccuracies here... Dynamics is a family of business applications. Microsoft has two ERPs (BC and F&O) aimed at medium and large companies respectively. Coca Cola actually runs on D365: https://news.microsoft.com/source/2020/04/27/the-coca-cola-company-announces-strategic-partnership-with-microsoft-to-transform-global-engagement-and-experiences/