It is both underserved and overserved.

The problem for small businesses is ownership and tailoring/complexity. Self-hosted solutions sound great but you need someone that knows how to run it.

Cloud solutions sound great and every VC-funded startup (there is plenty) would love you to buy-in, but that's a massive operational risk to a small business that would become entirely reliant on it. That's on top of every ERP having different workflows and either having to adapt to one or customize it to match your small business. Small businesses often don't exist by copying the ideas and workflow of another company as several industries can be highly competitive and the smallest of "custom steps and processes" can eek out a tiny niche.

And then there's the "big brand, never going away solutions", but they cost a fortune beyond what any small business can afford and likewise need developers just to customize it.

So, with many small business owners, who most likely are not a HN user nor have a github account and work on stuff that has nothing to do with the web. They will look at the ERP offerings, look at their spreadsheet and say "yea imma just go with excel"