Industry Research Publication Date: 21 November 2005 ID Number: G00131715 Magic Quadrant for Higher Education Administrative Suites, 2005 Marti Harris, Michael Zastrocky With Oracle's acquisition of PeopleSoft, institutions have fewer choices for higher education administrative applications vendors. SAP and Jenzabar have moved into the Challengers quadrant this year, while Oracle has joined established leaders Datatel and SunGard SCT. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.
WHAT YOU NEED TO KNOW The market for higher education administrative applications is much tighter this year in the wake of Oracle's acquisition of PeopleSoft. Although this has created some confusion in the market, institutions continue to move forward with plans to replace outdated administrative applications. However, institutions in the early stages of the process continue to be cautious, and concern over vendor viability is very strong. The demand for interoperability continues to grow as institutions struggle to integrate their ERP, course management systems, library management systems and facilities management systems with enterprise portals, security, identity and access management, and content management. Institutions must continue to focus on their current and expected needs, and measure solutions against those needs. Publication Date: 21 November 2005/ID Number: G00131715 Page 2 of 11
MAGIC QUADRANT Figure 1. Magic Quadrant for Higher Education Administrative Suites, 2005 Source: Gartner (November 2005) Market Overview In Gartner's 2005 Higher Education Administrative Suites Magic Quadrant, the number of vendors has been reduced from seven to six as a result of the Oracle acquisition of PeopleSoft. Datatel, Oracle and SunGard SCT share the Leaders quadrant this year. SunGard SCT's greater flexibility in product configuration, available through its Unified Digital Campus options, demonstrates its stronger vision for higher education. Datatel continues to produce strong revenue and customer stability. Oracle moved up from the Visionaries quadrant on the strength of the PeopleSoft higher education product line and customer base. The three leaders each have at least 300 customers live on their full administrative suites, including the student systems modules. The number of companies in the Challengers quadrant moved from zero to two as SAP Publication Date: 21 November 2005/ID Number: G00131715 Page 3 of 11
strengthened its marketing efforts for higher education and Jenzabar stabilized and enhanced its offerings. Campus Management, a newcomer to the Magic Quadrant last year and a leader in the proprietary schools market, continues to move forward in the Niche Players quadrant, growing its business to support traditional institutions. This year's Visionaries quadrant is vacant. Market Definition/Description Higher education administrative suites are becoming more complex, and interoperability issues have pushed vendors to create, acquire or build partnerships with other vendors to meet pressing needs. A higher education administrative suite comprises at least three components that are loosely or tightly coupled: Financials, including procurement, accounts payable, accounts receivable, fixed assets, general ledger, budget development, sponsored research accounting and endowment management Human resources, including personnel management and payroll Student information, comprising enrollment management; financial aid (with communication management, packaging, and reporting); registration, grading and transcript; advising; and degree audit Although the following capabilities are not requirements for inclusion in this Magic Quadrant, they are important to higher education and are often included in requests for proposals and requests for quotations: Grants management, with both pre-award and post-award tracking and management Advancement, including fund-raising, corporate giving, and alumni management Facilities scheduling Enterprise portals The interoperability of modules within a suite, along with middleware, will push some vendors toward partnerships and development in the middleware space. Security and identity management strategies are expected to be included in vendor offerings. Inclusion and Exclusion Criteria To be included on Gartner's 2005 Higher-Education Suite Magic Quadrant, vendors must have: Added A customer base that includes degree-granting institutions public and/or private A full-function application suite, minimally including student system, financials and human resources Regular inquiries from Gartner clients during 2005 No new vendors were added to the Magic Quadrant in 2005. Dropped As a result of its acquisition by Oracle, PeopleSoft is not included in our 2005 Magic Quadrant. Publication Date: 21 November 2005/ID Number: G00131715 Page 4 of 11
Evaluation Criteria Ability to Execute A vendor must be able to deliver on a vision, and the Magic Quadrant's vertical axis (Ability to Execute) measures how well the vendor performs against today's assessment metrics. The following criteria are considered when evaluating the ability to execute: Product/Service:Current higher education suite functionality across the application components described above. This includes the underlying technical architecture and the completeness of the modules/components offered. Overall Viability: The organization's overall financial health, the financial and practical success of the business, and the likelihood the company can or will continue to invest in its higher education suite. Sales Execution/Pricing: The vendor's capabilities in all sales activities and the structure that supports them. This criterion includes an assessment of the suite license costs, implementation cost and ongoing cost of ownership. Market Responsiveness and Track Record: The vendor's overall effectiveness in the market, including its responsiveness to users, its ability to articulate a clear value proposition and the number of live implementations of its higher education suite. Customer Experience: The vendor's ability to deliver a product that meets the institution's needs, as well as the ability to provide pre- and post-sale support that enables clients to successfully employ their higher education suite. This includes the quality and availability of vendor support, in addition to implementation services. Operations: The ability of the organization to meet its goals and commitments with respect to the higher education suite. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the vendor to operate effectively and efficiently in the higher education market on an ongoing basis. Marketing Execution:The level of public-domain awareness of the solution and the perceived quality of the vendor's brand in the higher education market. Table 1. Ability to Execute Evaluation Criteria Evaluation Criteria Product/Service Overall Viability (Business Unit, Financial, Strategy, Organization) Sales Execution/Pricing Market Responsiveness and Track Record Marketing Execution Customer Experience Operations Source: Gartner Weighting high standard low standard high standard low Publication Date: 21 November 2005/ID Number: G00131715 Page 5 of 11
Completeness of Vision The vendor must have a vision for the higher education market that matches the currently stated and expected vision for client/prospect institutions. Our assessment of a vendor's completeness of vision includes the following criteria: Market Understanding: The ability of the vendor to understand higher education user needs and translate those needs into products and services. Vendors that show the highest degree of vision both listen to and understand higher education user wants and needs and can shape or enhance those wants with their added vision. Marketing Strategy: A clear, differentiated set of messages that match their vision for higher education with the products and services offered and that are consistently communicated throughout the organization and externalized effectively to the higher education market. Sales Strategy:The strategy for selling higher education administrative suites that uses the appropriate network of sales, marketing, service and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the higher education customer base. Product Strategy: The higher education administrative suite product strategy, covering breadth and depth of functionality, underlying technology and openness. Business Model: The soundness of each vendor s strategy to bring higher education administrative suites to market that are sustainable for the future. Vertical/Industry Strategy: Not rated. Innovation:Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes. Geographic Strategy: Not rated. Table 2. Completeness of Vision Evaluation Criteria Evaluation Criteria Market Understanding Marketing Strategy Sales Strategy Offering (Product) Strategy Business Model Vertical/Industry Strategy Innovation Geographic Strategy Source: Gartner Weighting standard low low high high no rating high no rating Leaders Vendors in the Leaders quadrant have the highest combined measures of ability to execute and completeness of vision. They are performing well, are prepared for the future and have strong customer bases that have fully implemented their suites. These vendors' assets include strong channel partners, consistent financial performance, broad platform support, good customer Publication Date: 21 November 2005/ID Number: G00131715 Page 6 of 11
support, the most-comprehensive and scalable products in the market, and the ability to deliver all of the key higher education administrative suite capabilities. Strong vision reflects a solid product and go-to-market strategy for higher education, combined with a management vision for higher education. Challengers Challengers often have a substantial number of installations, but lack the vision of leaders or don't own all of the most-relevant components of an administrative application suite for higher education. Instead, they leverage partnerships to round out their solutions. Visionaries Visionaries have strong vision, but their market performances have not demonstrated good execution. They may partner for several core administrative suite components. Niche Players Niche players either successfully focus on a small segment of the market, or do not focus on a particular segment, but have modest horizons and possibilities owing to their inability to innovate or outperform other vendors. A niche player may also be a recent entrant to the market that has yet to establish "mind share" for its ideas and market share with its products. Vendor Comments Campus Management Campus Management, a strong, established player in the post-secondary proprietary school marketplace, has moved into the traditional higher education space in North America. Although only a handful of its more than 900 customers are traditional colleges and universities, the number is growing, and Campus Management has more than met its stated 2005 goal in the traditional higher education space. The CampusVue Collegiate student system, built on Microsoft technology, remains a practical fit for the higher education market. In October 2005, Campus Management signed an exclusive agreement with Empower Financials. Under the terms of the deal, Empower's higher education financial and HR software will be re-branded by Campus Management as CampusVantage and integrated with its SIS, which will enable Campus Management to offer its own financial solution as an alternative to its current use of the Microsoft Great Plains and Blackbaud financial systems. Gartner believes that Campus Management's low prices, tight integration of modules and aggressive marketing will help establish the company in the traditional small to midsize college market. Colleges in this market should include Campus Management on their lists of potential suite vendors. Datatel Datatel has excellent customer relations, consistently performs well financially and maintains a solid reputation within its largely midmarket customer base, which includes a growing number of community college consortia. Release 18, which was made available to SQL clients in September 2004, offers greater functionality and extends the reach of Datatel to support a broader group of institutions with diverse needs. Expected availability of Release 18 for all current clients is now promised for December 2005. Datatel has met its goal of being platform-independent by offering Oracle, SQL and IBM UniData. The majority of its 679 customers have chosen to stay with UniData. However, in the past two years, 52 percent of new customers chose SQL, with 43 percent selecting UniData and 5 percent Publication Date: 21 November 2005/ID Number: G00131715 Page 7 of 11
choosing Oracle. We expect Datatel's future growth will be built on customer utilization of the SQL server platform. Of the three currently available platforms, we recommend that new Datatel customers select SQL or Oracle. Jenzabar Jenzabar has made strides in recent months in marketing its offerings and re-establishing its role in the higher education small to midsize market. The Jenzabar Internet Campus Solution (JICS) has been adopted by a large number of clients and provides appealing options such as single sign-on and relationship management. The JICS v.6.0 Web portal and CRM-based products built on a.net framework have strengthened its marketing efforts. The need to support a variety of products and platforms continues to be a challenge. Jenzabar remains committed to supporting older products, but 2005 confirmed a growing number of legacy platform clients migrating to newer Jenzabar platform products. Additional partnerships have been established in the past year, and Jenzabar has improved its ability to integrate offerings with other products. Jenzabar's continued improvement in this area is necessary in order to rely on it for management of campus integration. Oracle Oracle Enterprise, formerly PeopleSoft Enterprise, remains a force in higher education through its mature features and functionality. Before its acquisition, PeopleSoft was the dominant force in the research university market. Although slow to articulate its plans for higher education following the PeopleSoft acquisition, Oracle has developed a promising strategy for higher education clients and prospects. Current customers are cautiously optimistic, but should continue to check with Gartner for updates on migration strategy. Enterprise Campus Solutions (CS) release 8.9 moved the product toward a service-oriented architecture, added Unicode support, and improved navigation and systems tools. Much of the functionality from CS will likely end up in the nextgeneration application suite. The new product is tentatively scheduled for release in 2008 with a migration path for higher-education clients moving from either the Enterprise CS or the E- Business Suite Oracle Student System. Because Oracle has announced continued service and support of CS, current CS customers that remain skeptical of Oracle will have more time to evaluate its plan to migrate to the fusion application or select a replacement system. SAP Before Oracle's takeover of PeopleSoft, SAP benefited from the desire among research institutions for an alternative to PeopleSoft. SAP's strong marketing efforts in North America in 2005 find it bidding competitively for university administrative suites and best-of-breed procurements. SAP's sale of its higher education suite to Purdue University and the University of Kentucky represents major wins in the higher education market. Universities replacing a complex, homegrown student information system (SIS) might be attracted by SAP's willingness to configure and enhance the student system by partnering with the university to meet requirements. SAP is known globally as a leader in financial applications, and a significant number of universities are running SAP financial applications. The SAP Campus Management student system's lack of a financial aid leads North American institutions to consider the SIS incomplete. SAP will be viewed cautiously in the higher education suite market until: 1) more universities are successfully live on the full student system, and 2) the student system's functionality and features meet customer expectations set by the more-mature student systems in this space. Publication Date: 21 November 2005/ID Number: G00131715 Page 8 of 11
SunGard SCT SunGard SCT has the largest customer base and broadest product line among higher education administrative systems vendors. SunGard SCT's line has been broadened through enhancements and new products, including integration and business intelligence tools aimed at realizing the company's vision of an open, highly integrated Unified Digital Campus (UDC). The UDC concept has been realized at institutions that have successfully integrated SunGard SCT products such as SCT Luminis, SCT Information Access and pieces of the SCT Matrix solution as well as non-sungard SCT products such as e-learning applications into SCT Banner. However, it will be a challenge for SunGard SCT's many product initiatives to continue to converge and demonstrate new business value. SCT Banner has extensive functionality and a record of successful implementation. As Oracle moves to a Fusion development platform, customers should benefit as SunGard SCT moves away from the often-criticized, older Oracle Forms. The formation of the SunGard Higher Education Solutions business unit, which includes SunGard Collegis, SunGard BSR and SunGard SCT, is consistent with SunGard's strategy for growth in the higher education market. RECOMMENDED READING "Magic Quadrants and MarketScopes: How Gartner Evaluates Vendors Within a Market" Evaluation Criteria Definitions Ability to Execute Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets, skills, etc., whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria. Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue investing in the product, to continue offering the product and to advance the state of the art within the organization's portfolio of products. Sales Execution/Pricing: The vendor s capabilities in all pre-sales activities and the structure that supports them. This includes deal management, pricing and negotiation, pre-sales support and the overall effectiveness of the sales channel. Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness. Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message in order to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional, thought leadership, word-of-mouth and sales activities. Publication Date: 21 November 2005/ID Number: G00131715 Page 9 of 11
Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements, etc. Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis. Completeness of Vision Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those with their added vision. Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the Web site, advertising, customer programs and positioning statements. Sales Strategy: The strategy for selling product that uses the appropriate network of direct and indirect sales, marketing, service and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base. Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and future requirements. Business Model: The soundness and logic of the vendor's underlying business proposition. Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including verticals. Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes. Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market. Publication Date: 21 November 2005/ID Number: G00131715 Page 10 of 11
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