AI AND ML

Look to AI agents and open source to escape the vendor-driven upgrade cycle

Weeks after Salesforce boasted about the adoption of "headless CRM," the concept of "headless ERP" crops up.

This notion, according to Seth Ravin, CEO of third-party support vendor Rimini Street, is coming to help beleaguered ERP customers escape the application upgrade treadmill driven by the dominant database vendors.

For Salesforce, its Headless 360 allows customers to access all of their Salesforce data from developer tool Cursor, WhatsApp, ChatGPT, Claude, or a terminal. It has processed 4.5 million MCP calls and nearly a trillion API calls since launching in April, the CRM giant said.

For ERP, a monolithic category of enterprise software that conducts financial planning in some of the world's largest companies, the idea is the same, Ravin told The Register. Build a UI layer on top of existing applications, with AI agents or workflow software, and swap them out when the business is ready.

Eventually, the business data can be moved to an open source or source-available database such as PostgreSQL or MongoDB.

"PostgreSQL is number one," Ravin said. "Anyone who's doing open source is leading with PostgreSQL. MongoDB is number two. You're watching this whole decoupling of [ERP] technology and use of open source. You're going to see more and more of this. It's going to change the whole way we think about these big packages that users have been buying in the past."

He is not alone. Research conducted by Censuswide with 4,295 CFOs, CISOs, CIOs, and CEOs found 70 percent do not see traditional ERP as the future. The study, commissioned by Rimini Street, found 36 percent favored a "composable, modular, flexible, API-driven, best-of-breed model" while 33 percent would lean toward "agentic ERP [with] autonomous, AI-driven decision-making".

Concepts like headless and agentic ERP may seem nebulous now, but SAP, which counts some of the world's largest manufacturers as its customers, had to U-turn on its decision to restrict AI agents on legacy and on-prem software. It had said such innovations would only be available in its latest suite of applications and data products in the cloud, but demand from users forced a rethink this year.

Ravin said the impact of agentic AI was "scaring the hell out of everyone from SAP on down."

"I guarantee you that they're in a panic because they just don't understand the customers are getting ahead of them, the technology is coming apart underneath them, and they're trying to keep up, but the reality is they've built a business off controlling a customer by having all of this software, and they tell them when to [upgrade] and what to move to, and threatening them, and that's just not going to work."

SAP maintains that the combination of its agent platform, Joule, its cloud-based Business Technology Platform for integrating applications, S/4HANA ERP software, and Business Data Cloud data warehouse and data lake environment brings immense value to customers by providing a single semantic layer over their business data.

Nonetheless, it has struggled to get customers off its legacy or on-prem systems. Gartner figures from the end of Q4 2024 showed only 39 percent of worldwide ECC customers – from a total of 35,000 – had bought or subscribed to licenses to start their transition to SAP S/4HANA. This year, The Register revealed the company was about €2 billion short of its target for converting on-prem support into cloud revenue.

Ravin said customers will take the opportunity presented by maintaining legacy systems to consider their ERP stack. "They're starting to understand that [ERP] is breaking apart into smaller pieces, those pieces are further breaking into pieces that will be microservices."

Business processes will be run by a set of APIs running between existing elements of the application portfolio, he said. "Those processes will then get over the top of them a custom [agentic] UX, which will become a truly headless ERP, and you've already seen Salesforce come out with headless CRM. This trend is happening."

Rimini Street is a services company that specializes in maintaining legacy ERP systems without vendor support, until 2040 in the case of ECC. It has a vested interest in giving customers time to select a strategy for the future of ERP.

As investors eye software in light of AI agents and AI coding, giants like Salesforce and SAP have seemingly been forced to respond. Whether the headless ERP concept takes off or not, the industry is moving fast. ®