Despite all the talk about dealers switching computer vendors, the market share of the major vendors has changed little during the past six years, according to a study by Electronic Data Systems Corp.'s Automotive Retail Group in Troy, Mich.
Two companies still dominate the market. They are Reynolds and Reynolds Co. of Dayton, Ohio, and ADP Dealer Services Group of Hoffman Estates, Ill., a unit of Automatic Data Processing Inc. Universal Computer Systems of Houston is a distant third, EDS finds.
When vendor contracts expire, few dealers replace their vendor. The change is painful, involving a major hardware and software expenditure and retraining for employees.
'Even if the dealers are dissatisfied, they don't see enough of an advantage to switch to somebody else,' says Matt Parsons, marketing manager for EDS Automotive Retail Group. 'They don't want the disruption of business and purchase of equipment.'
According to EDS, about 20 percent of the dealers each year have the opportunity to re-evaluate their vendors and the option to terminate an agreement without penalty.
'But just 3 percent to 6 percent of the dealers who are making that decision (at contract expiration) switch from one provider to another,' Parsons says. 'They don't see enough differentiation between vendors. There is always baggage that comes with every system.'