BAAN Company: The rise and fall of its ambitious but risky web strategy

In the mid-1990s, the Dutch Baan Company was ranked the sixth largest software company in the world and number three in the Enterprise Resource Planning (ERP) market segment. Immediately after the company's floatation in 1995, CEO Jan Baan launched an ambitious strategy for rapid growth through ongoing innovation and dynamic networking, with the aim of becoming a market leader in enterprise software. As a pioneer in the open client/server market, Baan was now seeking to improve its products and services to offer its customers greater flexibility and ease of application, with significantly lower investment and costs levels. To be successful and achieve rapid growth in this emerging market, Baan had to establish a network of co-makers and partners to develop, sell, and distribute its product package, as well as provide service support. In 1996, Jan Baan announced the creation of the Baan Web, inspired by McKinsey consultants and facilitated by a favourable price/earnings ratio. It was expected that a larger business web would be more interesting for Baan's customers because it would offer a better, more varied, and more innovative product range. Furthermore, if the number of installed software products would increase, the Baan Web would become more attractive to potential participants, new customers would be attracted by a broader product offering, which would eventually lead to additional sales.