SAP Watch


March 23, 2007  3:40 PM

Oracle sues SAP: The fight gets dirty

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A quiet afternoon spent prepping for March Madness was interrupted Thursday, as news of Oracle’s lawsuit against SAP hit the wires. Was this just another spotlight-grab by one of the best in the business, Larry Ellison? Or was there something to it?

As outlined in the Eye on Oracle blog post, the charges Oracle is pressing against SAP seem to have real merit, and the level of detail in the lawsuit is pretty impressive. It will certainly be interesting to see which company prevails in court or if there’s some sort of settlement.

For its part, SAP just issued a statement from Steve Bauer, VP for Global Communications, saying:

"SAP will not comment other than to make it clear to our customers, prospects, investors, employees and partners that SAP will aggressively defend against the claims made by Oracle in the lawsuit.  SAP will remain focused on delivering products and services — including those from TomorrowNow — that ensure success for our customers."

The lawsuit does raise a couple of interesting questions beyond who will prevail: In a competitive market like this, with two companies that clearly don’t like each other, should we be all that surprised that something like this would happen? And while it is pretty clear, if the charges are true, that SAP did something wrong, will Oracle really be able to prove damages?

Addressing the first question first, in any market as fiercely competitive as this one, companies are constantly trying to get an edge. It is an expected part of doing business.

“This is something that is done a lot in the industry, where companies do whatever they can to find out about competitors at different levels and to different extents this stuff is done more often then you’d think,” said Martin Schneider, senior analyst for enterprise software for New York’s 451 Group.

However, the activity described in the lawsuit goes beyond the usual competitive hijinks we see between software vendors, like having competitive intelligence folks scouring the Web for any tidbit of information or snippet of code. 

“It was password-protected information. Does that make it wrong? Yeah,” Schneider said. “So, it’s really the methods they used. And some of it was so obvious, the people obviously weren’t hiding the fact that they had no business on the site.”

Material from the brief Oracle filed backs this point up, somewhat hilariously, stating:

“In many instances […] SAP employees used the log-in IDs of multiple customers, combined with phony user log-in information, to gain access to Oracle’s system under false pretexts. Employing these techniques, SAP users effectively swept much of the contents of Oracle’s system onto SAP’s servers. These ‘customer users’ supplied user information (such as user name, email address, and phone number) that did not match the customer at all. In some cases, this user information did not match anything: it was fake. For example, some users logged in with the user names of ‘xx,’ ‘ss,’ ‘User’ and ‘NULL.’ Others used phony email addresses like ‘test@testyomama.com’ and fake phone numbers such as ‘7777777777’ and ‘123 456 7897.’”

Yes, you read that right — “testyomama.com.”

But Schneider also pointed out that SAP probably could have gotten the information in other ways. After all, if SAP was taking on these new customers from Oracle, a lot of the materials were probably available from the customer side.

“I think they were just kind of making neat and tidy collections of stuff that they could’ve gotten in other ways,” he said. 

But while what SAP allegedly did was sketchy at best, actual monetary damages will be more difficult to prove.

“If the information was that valuable to Oracle it would’ve policed the site a little more,” Schneider explained. “It would’ve had security and alerts so it could’ve stopped it more quickly. They would’ve turned off access as soon as customers left,” Schneider said.

Think of your typical subscription to, say, ESPN.com Insider. When a user’s subscription runs out, ESPN immediately cuts off that user’s access to Insider content — I know firsthand. And that content is only worth $39.95 per year.

So, the actual damage to Oracle may be tougher to prove than SAP’s wrongdoing. And if this was some small, independent reseller, Schneider thinks Oracle would likely have just sent a cease-and-desist letter.

“Are they making a mountain out of a slightly smaller mountain? Yes. I won’t say it’s a molehill, but they are making as big a deal as possible about it because SAP is their biggest competitor,” he said.

The ultimate fallout of the lawsuit remains to be seen, and we’ll keep a close eye on the situation. We’re, of course, interested in your thoughts. Will this hurt SAP in the long run? Does it make you less likely to purchase SAP products? Any predictions on an award or settlement? Drop us an email at jfranke@techtarget.com to let us know what you think.

Jon Franke
News Editor

March 20, 2007  6:54 PM

SAP On Demand — for real this time?

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It's no exaggeration to say that SAP's CRM On Demand debut last year was rather lackluster. But now it seems SAP has made a 180 degree turn, going from "Bah!" to "Wow!" in just a year. It's kind of like how Microsoft went from dismissing this Internet-thing as a fad to declaring itself its patron saint with a snap of its fingers. Nicholas Carr summed up the transformation fairly neatly in his recent blog post, SAP CEO calls SaaS "the better model".

In a nutshell, SAP is going all Gung Ho with its new A1S On Demand suite, expected to launch by the end of 2007. However, fellow blogger Vinnie Mirchandani points out that this is primarily applicable for small customers — not the big boys that traditionally make up SAP's customer backbone.

That makes a lot of sense. Businesses too big for BusinessOne but too small for All-in-One can't throw big bucks around on upgrades or keep an army of highly skilled SAP experts on staff. Paying a certain premium for the basic functionality of an SAP ERP suite with a fraction of the hassle allows these guys to focus on what really matters. By contrast, applying this to a megasized multinational firm with 50,000 users worldwide doesn't sound like that hot of an idea. 

Dan Farber weighed in with some good points about overlapping products; a step-by-step approach based on size makes perfect sense in theory, but what about the company that strikes luck and rapidly grows from say 100 employees to 500? Or not so rapidly for that matter, where years of working with and tweaking one solution makes the transition all the more painful if there is no natural upgrade path? 

As always, it's hard to predict the future when all you have is powerpoint slides and grandiose presentations. A1S might blow us away, or it could be another underwhelming experience a la CRM On Demand. And perhaps there are additional tricks up SAP's sleeve; that mighty jump to 100,000 customers by 2010 has to come from somewhere. Let's hope Sapphire in Atlanta gives us some additional clues on this development next month. Also, don't miss our sister site SearchOracle.com's take on the matter here.

Matt Danielsson
Editor


March 14, 2007  2:36 PM

Oracle's Hyperion deal: challenges, opportunities and expert predictions

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Not surprisingly, the Web has been abuzz with speculation and opinions since Oracle announced its intent to purchase BI firm Hyperion two weeks ago.  The bulk of bloggers and writers seems to argue that SAP needs to up the ante and make a big acquisition of its own. Ventana Research was quick to make that point, suggesting Cognos or Infor as a possible target — or perhaps that SAP would be better off making an offer of its own for Hyperion. Flashbacks of the Retek bidding war, anyone?

One of the more interesting takes on the subject is Roth Capital's stern advise to Hyperion stockholders to shoot down the deal, arguing Oracle is getting "the deal of the century". While $52 per share is well above historic levels over most of the past five years, time will tell if stockholders heed the call.

In the meantime, Dennis Howlett at Accmanpro.com dubs the whole affair "Hype-erion" and opines that Microsoft is lurking in the wings with a hidden BI gem for midsized markets. While he concedes it probably won't be a category killer, he does make a good point that we shouldn't lose sight of the big picture in all the hoopla. But then again, when isn't that the case?

Tony Lock of the Freeform Analyst Team took a more practical approach. Assuming the deal goes through, Oracle faces a steep challenge beyond mere technical integration. Let's not forget that one of the keys to Hyperion's success is its ability to play nice with a wide range of environments, Lock said. The question is whether Oracle can keep those relationships going while simultaneously being the fierce competitor we've come to know. Or to put it more bluntly: will bringing nice-guy firm Hyperion into the fortified Oracle bunker make a good-sized chunk of the goodwill and business value wither away in the process?

A similar riff can be found in Bloor Research's take on the deal, where the question is whether there will be a mass exodus of qualified sales reps from Hyperion as the deal closes: 

"Mixing an IT salesman with a finance salesman could be a highly potent combination. On the other hand it could be oil and water, and Hyperion could lose a chunk of their salesforce to the likes of Microsoft, Business Objects, and Cognos, who cannot wait to get their hands on their finance-savvy Hyperion salespeople."

Challenges abound for Oracle, and we don't know what SAP has up its sleeve yet. Is it going to take the advice of the pundits and go on a shopping spree of its own, or will it repeat the targeted attack-campaign of the PeopleSoft days and spin gold out of the fear and confusion? Rest assured we'll keep a close watch on this as the deal unfolds!

Matt Danielsson
Editor


March 1, 2007  6:13 PM

Oracle buys Hyperion, SAP on the ropes?

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Oracle's shopping spree is not over, as became apparent with today's announcement that it is acquiring business intelligence giant Hyperion. Oracle president Charles Phillips made no secret about targeting SAP.

Many SAP customers use Hyperion, Phillips said, and Oracle is achieving 'critical mass' within SAP accounts.

"Now Oracle's Hyperion software will be the lens through which SAP's most important customers view and analyze their underlying SAP ERP data," he said.

Indeed, Hyperion has 12,000 customers worldwide, including 96 of the Fortune 100 and 96 of Global 100, according to the company. Even our sister site SearchOracle.com is smelling blood in the water. 

Should SAP start sweating? Is it time to give up the organic growth-mantra and start eyeing Cognos or Business Objects for potential acquisition? SAP stock plunged at the news of the deal, but SAP itself appears unfazed. SAP spokesperson Matt Carrington had this to say:

"Oracle's strategy, limited by its inability to grow on its own, has resorted to attempting to acquire customers. This latest acquisition only further muddies Oracle's already cluttered application landscape. SAP has more than 2.5 times the market share in applications than Oracle does, and despite all the billions of dollars Oracle has spent on more than 20 acquisitions, SAP still gained 3 percentage points of market share in 2006 alone. The question that needs to be asked is: Has Oracle's acquisition strategy actually benefited customers?

SAP's focus is to deliver innovative and consistent products and results to our customers and shareholders. Our growth strategy focuses on organic growth, while we 'tuck-in' smart, well-placed acquisitions to round out our product capabilities on behalf of customers. The Hyperion deal is one more way that Oracle attempts to hide the fact that applications is not its core business, whereas applications has been, and will continue to be, SAP's core business. Oracle wants to distract the market from the real story — which is that Oracle has made no progress on applications software in 36 months, and we hear that Fusion is further delayed. In SAP's core market, Oracle is stalled with legacy applications and an uncertain future."

One thing is for sure: there is no love lost between SAP and Oracle. Stay tuned for more coverage on this as it unfolds, and don't miss our new reader poll on the Hyperion acquisition!

Matt Danielsson
Editor


February 22, 2007  8:18 PM

How SAP can improve: upgrade edition

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DENVER — The last session at ASUG's mySAP ERP Upgrade Symposium was a panel made up of users who had completed upgrades and SAP executives. We took this opportunity to ask what SAP could have done to make each customer's upgrade easier. Here are a couple of the responses:

Scott Petrack, Bayer Corporation
One of the things Bayer struggled with was trying to make decisions about the external environment around SAP. The company has 17 or 18 different third-party, complimentary software products that are interfaced or integrated with the SAP environment. So, it was a struggle for the team to determine whether these third-party products were going to be compatible in terms of the company's SAP upgrade.

"You go to the vendors and they say, ‘Oh, just go to the latest release of our product and everything will be OK,'" said Petrack. "I'm sorry, but that doesn't work for me."

As for what SAP could do to help solve this issue, Petrack said, "I would very much like to see, maybe as part of the certified partner program, SAP step up and say, ‘OK, here's the latest release of the product, and here's what we can report to you in terms of vendor compatibility.'"

Ian Wyatt, Cox Newspapers, Inc.
When Cox was entering into the upgrade, it wasn't entirely clear what it needed, what was recommended, and what options it had around support packs and stacks. This issue reared its head during the upgrade when the project team looked at some functionality in HR testing. That functionality changed with mySAP ERP 2005. But Cox had a problem with the new functionality that required implementation of a support pack — it wasn't available as a single node.

"Well, we didn't want to [implement the support pack] because we would have to go back and repeat a whole lot of testing," said Wyatt. "If we had known up front that we needed that support pack, no problem, we'd put it on up front and it would have no impact whatsoever. But, we didn't know, so we had to go back a bit."

"One thing I would like to see from SAP when going into an upgrade is more guidance around what support packs and support stacks you are going to need before you can start," he said. "You know, it wasn't a huge deal, but it did cost us some time." 

Steven Passer of NASA and Stefan Kneis, vice president and ASUG executive liaison at SAP, also responded. We'll have their take soon as well as something on Enhancement Packages. If you have your own ideas on how SAP can improve the upgrade process, please email me at jfranke@techtarget.com

Until then, we have to find a place to watch The Office in the Denver airport.

Jon Franke
News Editor


February 22, 2007  1:34 PM

ASUG's influence on SAP

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DENVER — We made it to the ASUG mySAP ERP Upgrade Symposium in Denver with no problems. There are about 200 attendees at various stages of upgrading to mySAP ERP 2005 — from just considering upgrading, to already done (granted, most of these people are presenters).

Since we're at an ASUG event, we asked for a couple specific examples of how ASUG had influenced SAP products or strategy in our interview with Stefan Kneis, vice president and ASUG executive liaison, and Martin Riedel, head of SAP's global upgrade office. Kneis's reply was:

Well, there's a lot, it happens on a regular basis. Influence councils are running on a monthly basis, and there are many real examples. An exciting one to me was the new xApps around sales operations planning which was really a story where ASUG told SAP to build a new product if you will. That's on the level of the influence councils.

Another example of influence from the group is the maintenance strategy. The 5-1-2 strategy [mainstream maintenance for all SAP products will for five years from the general release date. After that, customers can extend maintenance for one year for an additional 2% and for two additional years at a rate 4% above the annual maintenance fee.] was heavily, heavily driven by ASUG a few years ago. We had all kinds of maintenance strategies for different products and it was somewhat confusing for customers. ASUG really influenced our cleaning up of the maintenance strategy.

We're planning a couple more posts this week. We attended and interesting session that shed some light on SAP's enhancement packages strategy, so we're planning to post some information (and, if all goes well, pictures) from that. We'll also get some attendee comments on their upgrades and the conference in general.

Jon Franke
News Editor


February 19, 2007  10:36 AM

ASUG president talks Kagermann and upgrade event

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Weather permitting (we are flying Jet Blue), SearchSAP.com will be covering the ASUG (Americas' SAP Users' Group) mySAP ERP Upgrade Symposium in Denver Wednesday and Thursday. In advance of the event, we spoke with ASUG president Rod Masney about SAP CEO Henning Kagermann's contract extension and what to expect at the conference.

Masney was very positive about Kagermann's new deal and said he extended Kagermann congratulations that evening. Kagermann personally responded with thanks and good words for ASUG the next day. So, it's probably not surprising that Masney sees the extension as a good thing.

"We [ASUG] see it as a positive because of the relationship we've built with him and his team over the years and the programs we've worked on together. Henning has articulated his commitment to all the user groups, not just ASUG. He has articulated that there's value that groups such as ours bring to his customers. He shows this through SAP resources, time at our events and his personal time meeting with us."

Masney views Kagermann as atypical among CEOs in his willingness and interest in working with user groups. Kagermann generally meets with ASUG leadership face-to-face twice a year, once at Sapphire and once in Germany.

The co-location of the ASUG annual conference and Sapphire is a prime example in Masney's mind. He also mentioned that ASUG developed the "voice of the customer" program (where ASUG surveys members about SAP products, services and relationship with SAP) at Kagermann's request, as well as a book that ASUG and SAP are working on jointly.

"The board extending Henning's contract is a testament to the strategies he's put in place and the leadership he's demonstrated within SAP, the growth they've experienced and the commitment to the strategy around ESA and where they're taking the platform with the customers."

Masney indicated that ASUG really doesn't care who succeeds Kagermann, and mentioned the organization's relationship with Shai Agassi, president of SAP's product and technology group, and Léo Apotheker, president of SAP's customer solutions and operations, have grown in recent years as well.

"It's not a beauty contest. For us it's about having the right relationships and having the opportunity to have influence in SAP, as well as to demonstrate that we're delivering value by educating our members and giving them an opportunity to network and learn from each other."

Masney also talked about the upcoming upgrade symposium. He said the attendees will represent the whole spectrum of the upgrade process from just thinking about it to already in the throes of it. (Earlier this year, Masney said he was starting to see an uptick in users considering upgrades.)

"The whole idea behind a symposium is a very small [200-250], very focused, very intimate event. There is a real good opportunity for education and peer-to-peer networking. This is not for giving them big-picture, esoteric information, if you will. But more to deliver concrete stuff that attendees can take back and use in their business."

We're bringing our digital camera to the event, so we'll aim to have some thoughts and pictures posted on the blog late Wednesday or early Thursday. We'll also have a couple items up on the main site by later in the week. If there's anything specific you're interested in, please shoot me an email (jfranke@techtarget.com).

Jon Franke
News Editor


February 1, 2007  2:43 AM

SAP under fire: Axel speaks out on what SAP should do next

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You’ve probably read Axel Angeli’s guest editorial SAP under fire: Axel Angeli on why 2007 will be tough for SAP. Not surprisingly, there was an avalanche of reader responses. Some agreed and applauded the honesty, while some jeered and argued Dynamics was nowhere near ready for prime time. Axel answered two questions in depth yesterday; today he concludes his stint on the soap box by going to the heart of the matter:
What exactly did SAP do to fumble the ERP ball, and what can/should they do about it?

Axel: The SAP ERP is still the flagship of SAP, despite all efforts to gain market shares in areas where competitors seem to be strong. While FI/CO seems to be stable and has set the European way of accounting as IT standard all over the world, the SD/MM and PP areas are still areas where the customers ask for significant enhancements. Let us pick SD for instance… Currently, we still find a hybrid of functionality, powerful but extremely difficult to make any enhancements. And it is the latter that is more and more required by companies, especially if SAP wants to conquer the markets of the SMB. The classical areas of concern are variant donfiguration, pricing, special shipping & handling scenarios, intercompany invoices … all topics the experienced SAP consultant can be caught with a cheshire grimace on her/his face. 

Don’t let me be misunderstood: the functionality is powerful and covers many, many areas. But if you need to do something special, the SAP approach with user-exits (aka customer enhancements, BADIs) has its severe limitations. 

To cope with the challenges of agility, a more object-oriented approach, one that has been rightly drawn and begun with the BAPI concept, is required. And again, one has to regret that SAP lost the completion of the BAPI concept out of sight. The SD-BAPIs are far from complete: e.g. the “order read” and “order create” modules have different interfaces, isolated pricing modules are still missing, variant configuration is still dug far down in the inside belly of the SD core modules. Modern ERP systems would break down an SD component into small, self-contained objects that inter-operate through message pipes. That would even allow to run a SAP SD fully decentralized, maybe the order creation on one instance, the delivery on a second and invoicing on a third one. Revamping the BAPI concept might already bring a high degree of progress and eventually a convincing argument to upgrade a newer SAP release, one based on ROI instead of simply falling out of maintenance. 

SAP did well in the MM sector when succeeding in rewriting procurement in the form of the SRM component. SRM has all that the purchaser needs and it integrates with ease many external offers, like life vendor catalogue access, auctions or goods tracking via slim or sometimes not so slim Web interfaces. Although SRM might well be broken down in smaller atomic units, it is a step into the right direction of an object oriented componentization. However, the drink may be poisoned here as well: while SAP admits the necessity of integration, they are still reluctant in releasing interface specifications to the public and offering demo hubs against which developers can test their development. 

The peril is ante portas, not mainly and only in the shape of Microsoft Dynamics, whose principle power lies in the marketing strength or through Oracle where we observe – I admit: to my surprise – an increasing number of new “Peoplesoft” installation, mainly in countries where SAP traditionally had a bad standing, like France for instance. There is also the open source community that seems to increasingly enjoy the ERP worlds after they worked the CMS fields to exhaustion.  

Momentarily the importance of open source ERP is low due to the fact that although open source (SAP is also “open source”) they are mostly not “free software” sporting a pretty amusing variety of “licensing models”. I have seen licensing constraints where software is free but consulting must be purchased by the owner of the code and others that keep the software free for developers but require substantial licensing fees for productive use. Both models cannot work, as it is too obvious that the makers want cheap labor from the community but are pretty selfish when it comes to give anything back.

But there are also good examples of open source and free ERP approaches, like Adempiere that – after divorcing from Compiere on arguments about licensing philosophy – became number three in the charts of the most attended projects at SourceForge. Until now the ERP has not yet reached the PHP or Python community that would allow to run distributed ERP on cheap Web hosted platforms, giving the notion of EDI (Electronic Data Exchange) a completely new flavor.

Editor’s comment:
This is the last (?) part of Axel’s take on the “SAP under fire” issue. As always, we’d love to hear your thoughts on the matter. Reply to this post or send your thoughts to mdanielsson@techtarget.com.

Matt Danielsson
Editor


January 31, 2007  9:07 PM

SAP under fire: Axel responds

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We received a tremendous amount of reader feedback on veteran site expert Axel Angeli’s recent guest editorial SAP under fire: Axel Angeli on why 2007 will be tough for SAP. Here are some of the reader comments and Axel’s responses.

“I agree with Axel’s assessment that Microsoft Sharepoint will give SAP KM and EP a run for its money. I, with a group of other ‘pioneers’, have started an ASUG Special Interest Group to investigate and influence the interoperability of Sharepoint and the SAP Enterprise Portal. Many SAP customers will license the Sharepoint MOSS solution over the next few years because it certainly wins the ‘beauty contest’ and gives SAP a run for its money on robust search functionality.

Where Sharepoint is falling short is tying document management to business process via workflow and transactions. This is where you use Sharepoint for the user interface and document repository, but you run SAP workflow to handle the business processes, like approving documents based on document type and user hierarchies from HR organizational structures. I do not tout myself an expert in this area as we have just begun our journey down the path of interoperability, but I do see this being a relevant space within the SAP-Microsoft ecosystem.

– Name withheld, SAP Business Analyst, Longmont, Colo.”

Axel: I am happy to read this comment. I am convinced that something needed to be done in this areas. SAP has all the necessary features including a basic WEBDAV support, allowing one to map any SAP repository data source as a network drive. One should maybe make clear to the Sharepoint newcomers that Sharepoint stands for two completely different elements: the Sharepoint Services and Sharepoint Portal Server. The Sharepoint Services allow reading and writing back documents to a Sharepoint enabled server, while the Sharepoint Portal is a content management system that makes use of Sharepoint Services but otherwise is just another “Portal” and competes with SAP EP in this respect. We integrated Sharepoint Services successfully to open source CMS like Joomla or DRUPAL, hence I don’t see a reason why it should not comply with EP as well.

I would love to eventually read more on the progress of your ASUG SIG project and maybe participate on a blog on this.

“First of all, I think SAP didn’t drop the ball. I think SAP is doing very good job. SAP has already released its major version ECC 6.0 in 2006. No major releases are due until 2010. So SAP is up to date in all areas of ERP. SAP is ready to complete enterprise SOA technology. More enterprise SOA implementation projects and SAP upgrade projects will be implemented in 2007. As a result, more XI projects will be implemented in 2007 and demand for XI skills increases. Microsoft cannot compete with SAP in the ERP marketplace. They are still far away from SAP’s level. Microsoft enters every niche market. That doesn’t mean they can compete with SAP in the ERP market.

– Sobhan Annepu, Sr. Programming Analyst at Coca-Cola Bottling Co., Birmingham, Ala.”

Axel: Saying that SAP didn’t drop the ball may certainly be a matter of how you interpret the situation. I would say that SAP exactly DID drop the ball by putting a moratorium on release upgrades for four years and hence leaving ERP in the current state. It feels like leaving the dish in the kitchen sink after an opulent dinner. A moratorium will exactly be the kind of advantage that the competition is waiting for to dash into the gap.

When it comes to the mid-sized markets, SAP ERP won’t win the beauty contest. ECC is strong in features but weak when it comes to agility. For small and diversified production sites, the Microsoft AX “Hub and Spoke” concept appears to be more convincing. If I am asked to give a proper advice in strategy to SAP product life cycle management, I would opt for efforts to break down the SD/MM/PP complex into small objects that can be decorated by the customer at discretion if production is concerned that might be done on the basis of an “APO light”.

The weakness of Microsoft is currently the fact that AX (formerly: Axapta) still falls out of the Office licensing scheme and the frightening low number of developers that are familiar with the software. However, the latest release of AX sports a virtual machine and a script-like programming language that speaks for a serious effort to attack the markets of SAP. It might be a correct perception that Microsoft is ready to enter every niche market, but so does SAP.

I acknowledge that there will be an XI boom in 2007 and I already have predicted a shortage in skilled XI technical people. However, I stand firm to my belief that SAP has not yet reached a practical SOA, although I am certain that they are on track and will take over leadership in less than three years from now.

Editor’s comment:
As always, we welcome your input. Reply to this post or send your thoughts to mdanielsson@techtarget.com.

Matt Danielsson
Editor


January 29, 2007  10:11 PM

SAP trends 2007, part three

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Following the predictions of Logos GmbH founder Axel Angeli and Ventana CEO Mark Smith, it is now time for veteran SAP expert Dale Young to put forth his take on the major SAP trend of 2007. Like Axel’s most recent post, Dale chose to do it in the form of a guest editorial.

The key question
Why is the upgrade to mySAP ERP different than those that came before it?

Many SAP customers are at a crossroads for supporting future business needs and realizing the next wave of value from their SAP investment. First of all, today’s business environment is VERY different from when they originally put in R/3. There is an increasing amount of business competition, collaboration, globalization, standardization, commoditization and change.  They are likely are faced with new competitors, markets and products and their enterprise solutions must serve a new generation of customers, employees and partners (from generation Y) for whom technology is a normal life skill.

More complexity
Secondly, their original application strategy and enterprise architecture are likely more than five years old.  The ideal “clean” hardware, software, OS and database environments that were targeted with the first install have likely been more complex and less heterogeneous.  Business needs have changed; technology and Web services have matured; and SAP has entered into the architecture, Web enablement and integration space.  Computing infrastructure capabilities have also evolved.  There are significant new opportunities to optimize your enterprise infrastructure.

Finally, SAP has undergone a “Step Change” in its architecture and solutions.  NetWeaver and Enterprise SOA have emerged as the foundation for all SAP solutions; there are increased capabilities in the areas of data and information management; and new third party capabilities such as Microsoft Duet and Adobe IAF have been introduced. For the first time, the core business content that has been developed over the last 30 years by SAP will be available for an open, standards-based world. Also, SAP functional solutions have evolved and matured.  There are opportunities to take advantage of new functionality across the entire SAP solution suite and to simplify your overall enterprise architecture through additional legacy solutions retirement.

What does all this add up to?
When looking at all these factors together, you can see that this upgrade is different.  SAP customers are at a unique point in time where they can set the direction for their enterprise solutions for the next decade.  At first, this may seem to be a daunting task and very few enterprises have the luxury or can afford the risk of a wholesale rebuild.  Most organizations are following an “evolutionary” approach to dealing with this business revolution.

Dale Young, Vice President
North American SAP Alliance Leader

Editor’s comment:
Do you agree with Dale on this being the number one trend for 2007? Is it really that vital to upgrade? Do you trust the new lineup of feature-packed NetWeaver toys, or do you prefer to sit back and see what happens? Sound off and send your thoughts to mdanielsson@techtarget.com today!

Matt Danielsson
Editor


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