There is more happening than ever before in the development of ERP and related business solutions. The cloud as a technology platform, with the entire infrastructure in one place and dynamically updated, as well as the SaaS model and the increasingly important development of AI change a lot for the world’s companies in the relatively short term. The times are what they are, and technologically, it is hard to follow what mainly used to be evolutionary development loops, but these days of disruption tend to be more revolutionary. In situations like these, the analyst’s research and thorough evaluations play more important roles than usually, and Gartner is in this context one of the most respected. There are several reasons besides deep domain expertise, but an important one is the company’s integrity vis-à-vis software developers. Many analysts and research firms make a large living from commission income from software developers. For Gartner, this type of income is of less importance, while the money comes mainly from the users of the software. In short, the users want good solutions in place, which means that a consultant must have the best interests of the company in mind, rather than the best interests of the software developers. This is an important reason why today’s Magic Quadrant is important.
When Gartner analysts Greg Leiter, Tomas Kienast, and three other co-authors looked at today’s most important solution offerings, they generally state that ”ERP applications orchestrate and automate core operational and administrative processes and are the system of record for a significant number of business transactions.”
One trend that dominates this is that cloud ERP vendors emphasize standardization of core processes with innovation. Equally notable is that by 2027, 60 percent of customers replacing ERP applications will choose platform software and business process orchestration capabilities as critical requirements, along with transactional capabilities, to deliver more customized results.
Oracle Fusion Cloud: Strong Breadth but Support Lags
That said, let’s briefly take a look at the strengths and weaknesses that, according to Gartner’s evaluation, characterize the products in the 2025 ”Magic Quadrant for Cloud ERP for Product-Centric Enterprises.” Oracle’s Fusion Cloud ERP first:
The solution is thus a leader among the leaders according to Gartner.
Fusion Cloud ERP is aimed at mid-sized and large companies. The platform has, “a broad set of features supporting multiple industries, including industrial manufacturing, wholesale distribution, high technology, consumer packaged goods (CPG), energy, and life sciences.” Oracle Fusion Cloud ERP offers its AI Agent Studio to build custom agents. Oracle’s OCI platform offers iPaaS, API management, AI/ML, and analytics services.
Key new innovations include these agent-based AI capabilities in areas such as workforce scheduling, asset maintenance, and account reconciliation. Its roadmap focuses on additional prebuilt and extensible agent-based and GenAI use cases, continued rollout of the Oracle Redwood user experience, and enhanced integrations with Oracle’s industry-focused applications.
STRENGTHS:
- Broadness of capabilities: Oracle supports organizations with moderate to complex operating models, including capabilities for manufacturing, supply chain, finance, procurement, HCM, warehouse management systems, transportation management systems, and Enterprise Performance Management.
- Complex enterprise capability coverage: The robust, unified data model enables implementation across organizations with complex business models.
- AI and AI Agent Studio: Oracle has delivered GenAI and agent AI use cases across the Fusion portfolio, with thousands of customers using it in production
WATCH OUT FOR:
- Horizontal and vertical balance: Large, complex manufacturing companies need to identify vertical differences in requirements and configuration when using Oracle Fusion Cloud ERP.
- Single vendor presence (manufacturing): Oracle Fusion Cloud ERP is rarely used as a single vendor in complex manufacturing environments. Potential customers with complex manufacturing requirements will need to seek out other vendors to compare fit.
- Service and support improvements: Customer feedback shows that service and support scores, while improved, still lag behind.
No Surprise that SAP S/4HANA is in the Leaders Quadrant
It is hardly surprising that SAP’s flagship product, S/4HANA, lands in the top position in this evaluation. SAP Cloud ERP, previously known as S/4HANA Cloud Public Edition, is primarily aimed at mid-sized and large companies that need deep manufacturing capabilities across industries, including wholesale distribution, consumer products, and high-tech, worldwide.
Key new innovations include broader availability of embedded AI capabilities through a framework called Joule, which includes evolving conversational AI interfaces plus AI agent-building capabilities.
STRENGTHS:
- Partner ecosystem: SAP’s large partner network is an advantage for customers who need support from more sophisticated system integration services that go beyond technical migration services
- AI capabilities and roadmap: SAP has launched a variety of embedded AI capabilities in its software, including its Joule AI assistant. It has one of the more robust roadmaps for agent-based AI feature activation in the market.
- Extensive capabilities: Like IFS Cloud’s modular architecture, SAP Cloud ERP has value for companies that need to go beyond basic core financial management capabilities. The solution delivers PLM, supply chain planning, manufacturing planning, warehouse and transportation management, SAP Sustainability Control Tower, and embedded AI/ML in the cloud instance.
WATCH OUT FOR:
- Problems with adoption: SAP Cloud ERP lags in adoption among large enterprise customers. Consistent feedback says that a lack of depth of industry-specific functionality is the main reason to disregard it as a viable option.
- Go-to-market strategy: Several changes in messaging and positioning for this product, exemplified by the recent shift from GROW with SAP to SAP Business Suite (which includes SAP Cloud ERP). Customers and prospects cite this as a challenge when evaluating SAP solutions.
- Pricing: SAP’s contract negotiations are still seen as complex, despite recent changes aimed at improving and simplifying pricing.
Microsoft Dynamics 365 – Strong Solution With Embedded AI
Microsoft’s Dynamics 365 targets mid-sized to large-sized companies with supply chain management and finance. The solution leverages Microsoft Azure services and integrates with Microsoft 365 applications (Teams, Outlook, Excel, etc.) and Power BI. Key new innovations include domain-specific process mining and Copilot-powered capabilities for supplier communication, demand planning, and supplier invoice management.
STRENGTHS:
- AI-powered automation and agent capabilities: Microsoft Dynamics 365 has embedded AI, role-based Copilots, and autonomous agents that enable automated execution of complex tasks, beyond traditional assistance.
- Integrated cloud stack and unified data model: Dynamics 365 is built on the Azure cloud and provides a comprehensive and integrated technology stack designed for AI. Moreover, there are great features for low-code/no-code application development.
- Global reach: Dynamics 365 has solutions for more than 50 countries in over 70 languages.
WATCH OUT FOR:
- Vertical industry capabilities: While Microsoft claims to cover specific vertical industries, it often push for specific product-centric industry capabilities to a network of ISVs, OEMs, and system integrators.
- Global and complex customer references: Customers may struggle to find references to implement Dynamics 365 at scale.
- Complex customization: Leveraging the solution’s complex features often requires advanced technical skills and in-depth platform knowledge.
IFS Cloud – a Powerful Newcomer to the Leaders Quadrant
Finally, a few words about the newcomer to Gartner’s Magic Leadership Quadrant 2025, IFS Cloud. The platform targets mid-sized to large companies primarily in EMEA and North America. The ERP offering focuses on industries such as industrial equipment manufacturing, food and beverage process manufacturing, aerospace, defense, construction, energy, and project-based manufacturing.
IFS gets plus points for key innovations such as IFS.ai Copilot and some early AI agent capabilities. The vendor’s roadmap is centered around additional AI agent capabilities and integrating AI more broadly into the solution through co-innovation with its Nexus Black offering.
STRENGTHS:
- Strong industry focus: It offers a sharp portfolio of integrated capabilities, including manufacturing execution systems (MES), Enterprise Asset Management, and field service (FSM). It provides a core set of capabilities that organizations can enhance with components tailored to their strategic goals.
- AI-driven automation: The IFS.ai brand incorporates existing embedded AI capabilities, including their natural language AI assistant, as well as their agentic AI approach. They have launched multiple use cases for agentic AI in the areas of supplier management and demand management, and they have a very robust roadmap.
- Composition strategy: IFS Cloud has integrated IFS Cloud designers for user interface configuration. In addition, the IFS Connect integration tool and a comprehensive API library provide flexible options for users to customize their solutions through extended functionality.
WATCH OUT FOR:
- Ownership changes: The company has a private equity-backed growth strategy. This could impact the vendor’s strategic direction in the future.
- Modular licensing: While IFS offers flexible modules and functionality, this flexibility can create ambiguity about what is included in the purchase.
- Partner Network Development: While IFS’s partner ecosystem continues to grow, customers should assess their need for direct IFS engagement to ensure adequate support during their initiatives.
