J.D. Edwards & Company

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J.D. EDWARDS & COMPANY

J.D. Edwards & Company develops, produces, and markets software applications packages for business. It develops applications that can be used in every aspect of business, including supply, finance, human resources, manufacturing, and planning, and by most business sectors, such as chemicals, automobiles, arts and entertainment, and energy. Its flagship products, OneWorld and WorldSoftware, incorporate tools for enterprise resource planning (ERP), supply chain planning, knowledge management, and process integration. Services related to its software, such as training and consulting make up about 50 percent of J.D. Edwards' business.

In its software packages, J.D. Edwards made "interoperability" a byword. Beginning in the middle 1990s, J.D. Edwards began creating software that included all the essential functions needed by a business and allowed those functions to work together smoothly. This idea grew into a strategy the firm termed "c-commerce," or collaborative commerce. The c-commerce software packages it developed, in particular OneWorld, were suites of component with a variety of applications that could be used across a company or an industry. Diverse applications which previously were incompatible could "interoperate" in J.D. Edwards software. It threw up bridgeheads across networks, be they intranets, extranets or the Internet. Departments within a company could exchange data; as could companies collaborating on projects. It no longer mattered that their applications or even their computer systems were different.

J.D. Edwards' c-commerce approach offered many benefits. Some 60 percent of Fortune 500 businesses depended on three or more technology platforms. Software like OneWorld helped integrate these systems. Individual firms could exchange data about common projects, products, and services across systems efficiently in real-time. In summer 2000 J.D. Edwards intensified its commitment to c-commerce adopting a best-of-breed strategy for its software line. The firm's enabled a customer to select the best applications packages regardless of who produced them, rather than purchasing every application bundled together in a monolithic package from a single vendor. J.D. Edwards' software was able to integrate the diverse software into a seamlessly functioning system. Best-of-breed offered firm's an additional advantage—if it decided to alter or replace an application, it could do so without replacing its entire software system.

ONEWORLD

The OneWorld Suite is the flagship of J.D. Edwards' product line. It is a Web-enabled collection of business applications, a set of integrated components that can be assembled and disassembled to best serve the needs of a particular company. Released in 1997, OneWorld was designed from the ground up as a comprehensive component software architecture. It was one of the very first such systems on the market. OneWorld's architecture is a hierarchy comprised of six levels of components. Each level is constructed from the pieces in the next lower level. OneWorld's power and versatility come from its ability to combine its nearly 45,000 components to carry out a broad variety of business functions.

OneWorld's first level is comprised of about 30,000 predefined data elements, which constitute the building blocks of the system. The low-level components identify and store the most basic information and perform very simple calculations on that information. OneWorld users can also define new data elements. The second level is made up of tables and so-called business views, which assemble data from the first level and organize it into tables. Functions, such as joining or filtering, are also performed on the tables at this level to prepare them for the third level, business functions. There are nearly 3,000 business functions, each one of three types: field, line, or master. The nuts-and-bolts work of business is first apparent at this level. Field business functions control particular data fields in the application—price, for example. Line business functions control specific lines in a business form, for example, the third line of an invoice. Master business functions are set up to handle larger composite entities such as an entire purchase order.

Complex business functions, such as maintaining an accounting ledger, are performed in one of two modes, interactive and batch applications, at OneWorld's fourth level. The fifth level, OneWorld solutions, are programs that integrate all the lower-level business functions and application modes into complete, full-blown applications for different business activities, such as human resources, manufacturing, or finance. At the top-most level, OneWorld Vertical Market Suites, components are combined for the needs of specific industries, including energy, chemicals, engineering and construction, and public services.

OneWorld was designed to run on the Windows or UNIX operating systems, as well as on the IBM AS/400 platform, the system with which J.D. Edwards first made its name. A later version, OneWorld XE, included an "interoperability engine" that made it possible for users to integrate specific applications from different software or platforms, as well as from companies other than J.D. Edwards. A Hurwitz Group white paper on OneWorld called the package "a compelling choice for companies that recognize the importance of the technological and business cases for componentization."

HISTORY

J.D. Edwards was founded in 1977 by three employees at a Denver, Colorado accounting firm: Jack Thompson, Dan Gregory, and Ed McVaney. There was no J.D. Edwards—that was an amalgam of its founders' first names. The new company was set up to design business software for small and mediumsized computers. In the early 1980s it began specializing in software for IBM computers—first the IBM System/38, and in 1988 for the AS/400. WorldSoftware, a package of business applications introduced by J.D. Edwards in 1983, was the firm's leading product by the end of the 1980s. By 1992, the company was not only the world's largest producer of IBM midrange software, it was the 30th largest software company overall in the United States, averaging 15 percet annual growth for fifteen years running. By the early 1990s, 32 percent of J.D. Edwards' sales were overseas. More important, to achieve that astounding pattern of growth, it never needed to go public.

Edwards maintained its success through much of the 1990s. In 1996 it introduced OneWorld. Termed configurable network computing, OneWorld was the first shot in J.D. Edwards' c-commerce revolution. One year later, in August 1997, in the bull's rush for computer and Internet stocks, the firm launched a well-received stock offering. By the middle of the following year, the firm was worth nearly $1 billion and could boast an annual compound growth rate of 52 percent. As 1999 began, the ERP industry as a whole, and giants like SAP and Baan in particular, were reporting declines in profits; J.D. Edwards, however, nearly doubled its revenues. Flush with success, the company set its sights on overtaking the industry leader SAP within five years time.

In 1999, determined that its OneWorld package go head to head with high-end SAP and PeopleSoft offerings, J.D. Edwards moved all out into collaborative commerce. It acquired two companies, Premisys and Numetrix, whose technologies were essential to making OneWorld interoperable. However, the Year 2000 (Y2K) transition problem threw the entire ERP sector into a recession, and J.D. Edwards' fortunes took a major downturn in early 2000. In April CEO Doug Massingil left the company after less than a year and a half on the job, and was replaced by the man he had replaced, J.D. Edwards founder Ed McVaney. A month later the company announced that it would lay off around 13 percent of its workforce throughout the world, and its share price plunged from a high of $49 to a little over $10.

Struggling to recover, the firm announced OneWorld XPI—eXtended Process Integration. This best-of-breed software solution made it possible for J.D. Edwards' customers to incorporate diverse software applications into a single system that managed all operations and interconnected them. Technology licensed from Netfish Technologies and Active Software provided OneWorld XPI with its so-called interoperability engine. In January 2001, Edwards used the Internet for the first time to sell its systems directly to customers. Summer 2001 saw a chastened J.D. Edwards scaling back its ambitious plans to overtake SAP. The company refocused its attentions on the middle-sized companies that were always its bread and butter. In 2001, the company employed nearly 5,000 employees in 60 different offices throughout the world, and had approximately 6,000 customers in 113 countries.