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How SOA matters in SAP environments

Service-oriented architecture (SOA) has been a major background piece of SAP’s product architecture since the debut of NetWeaver. However, SOA took a front seat in 2008.

SOA is, strictly speaking, middleware — a platform that allows software systems to connect to each other, use bits of each other’s functionality/interfaces and draw from a common library of reusable logic. As such, SOA can lie at the heart of both an application infrastructure paradigm such as NetWeaver and specific developer tools. For example, consider the way in which SOA is now enabling SAP developers to work in Microsoft environments and vice versa. SOA was also behind one of the hits of TechEd, a spell check program for SAP.

But SOA is also very close to both the tools and techniques of business process management (BPM). It’s impossible to succinctly explain how these domains overlap, but one of our recent podcasts examined the interface between SOA and BPM in more detail. If you develop a stronger understanding of why SOA and BPM overlap, you’ll be well equipped to approach SAP’s new Business Process Expert (BPX) certification. Both SOA and BPM are fundamental components of the BPX curriculum and, if you want to call yourself a BPXer, you’ll have to master basic concepts that apply to both.

If you’re not sure whether you have a decent baseline of SOA knowledge, take our SOA quiz. It covers topics ranging from foundational concepts in Web services to SOA’s application in specific product components, such as the Enterprise Portal.

Finally, because SOA is right at the heart of both business processes and enterprise applications, it brings together what you might call the suits and the geeks. SOA is making these disparate communities speak each other’s languages, as you can discover on SAP’s BPX forum.

As always, don’t hesitate to let us know how we can continue to educate you on matters related to SOA.

Demir Barlas, Site Editor

SAP’s new Microsoft .NET-compatible NetWeaver tool

The SAP-Microsoft partnership, so momentous on paper, is actually quite modest, limited as it is to Duet. A recent SearchSAP.com readership survey indicated that many SAP customers are either unfamiliar with Duet or aren’t clear about what kind of real business value it can add to their companies.

This year’s TechEd offered signs that the SAP-Microsoft partnership is going deeper. Specifically, SAP offered a preview of the SAP Enterprise Services Explorer for .NET (call it SESEN for short) that will jazz up the partnership by offering .NET as well as ABAP developers a way to create interoperating services.

To understand SESEN better, remember that one of NetWeaver’s goals is to be a single interface to, and environment for, all of a company’s SOA-based services. Since services can be created by a number of different tools, this requires NetWeaver to be able to interact with other UDDI-based registries, such as those provided by Microsoft. SESEN functions as an add-in within Microsoft Visual Studio that effectively lets .NET developers more easily invoke and utilize SAP enterprise services in a Microsoft environment.

What does this mean in practice? SAP’s TechEd demo offered a thought-provoking use case. Imagine a scenario in which employees can choose their own company cars from a list of approved models (hardly a common case, but it made for a flashy presentation). With SESEN, you could use a Microsoft tool, such as Windows Media Player, as a front end from which to see a view of the cars. Clicking on the car invokes Microsoft Visual Studio logic, which would then pull up the SAP HR system to allow the employee to make a request to have a specific car assigned. This request would effectively go into the SAP workflow by being routed to a manager for approval.

That’s an example of an SAP service (call it “choose and approve company vehicle”) being consumed by a .NET application, but SESEN would allow you to go the other way as well, by calling a Visual Studio-defined service into the SAP environment. For SAP end users, this means easier access to services created in Microsoft and vice versa, and it should take Duet further by offering meatier integration between SAP and Microsoft.

SESEN, currently available on a trial basis from the SAP Developer Network, will be generally available at the end of the year. You can download it here.

Demir Barlas, Site Editor

SAP and Microsoft in talks?

Yesterday, rumors surfaced that Microsoft was in talks to acquire SAP. The news bumped SAP’s shares up, and notched Microsoft’s down.

Of course, in 2004, the antitrust case surrounding Oracle’s acquisition of PeopleSoft revealed that SAP and Microsoft had briefly and unsuccessfully talked about merging.

As luck would have it, SAP CEO Henning Kagermann was in Boston today for the SAP Influencer Summit to give a keynote and hold a press conference. When asked, point blank, whether SAP and Microsoft had discussions about a possible acquisition, Kagermann responded with a quick, definitive “no.”

So, this time it appears the rumor was just that.

Jon Franke
News Editor

Microsoft itching to fight SAP BBD

If you’re following the developments in the SMB (small and midsize business) space, you’ve probably heard about the latest Microsoft move. MS Dynamics Entrepreneur Solution is a new, fully Office-integrated suite aimed at the really small fry. Sage and Intuit are the primary targets for this particular release, and so far the release is limited to the Netherlands, but it’s another little step towards the SAP vs. Microsoft showdown we’ve talked about in the past.

SAP is betting the hard on the SMB market, but Microsoft certainly isn’t about to stand down. Indeed, Microsoft Business Solutions head Kirill Tatarinov recently told Reuters that he’s eager to meet SAP’s new Business ByDesign in the field.

“There are many organizations that may not use Dynamics just yet, but many are already using the infrastructure that Dynamics is built on,” Tatarinov said.

What makes this battle for the SMB space so interesting is the different strengths of the key players. Microsoft has a strong channel and beach heads everywhere, while SAP is (generally) technically solid. Oracle’s fierceness in and of itself goes a long way, and the smaller niche players have the advantage of specialization in their respective fields — which, in combination with their inherent nimbleness, may help keep the big bullies from stealing their lunch money. Here’s to an interesting 2008!

Matt Danielsson
Editor

SAP and Microsoft keeps dancing — and competing

The peculiar SAP-Microsoft partnership continues to deepen. We’ve written about this in the past, but I think Jon Reed summed up the situation best with the image of “one set of hands shaking and another set in a thumb war“. In the upper end of the market, SAP and the ’softies are best buds, as evidenced by their solid Duet commitment. Last I heard they were well past the 300,000 user mark and it was one of the big stories at Sapphire Atlanta last month.

This week was Sapphire Vienna, and sure enough, another big SAP-Microsoft story dropped: SAP and Microsoft are setting up a joint German lab to marry SAP’s Business Suite with SQL Server 2005. That makes a lot of business sense, and it doesn’t take much imagination to see this as another way of teaming up and sticking it to Oracle. Ellison had a pretty big week too by the way — the Agile acquisition alone is enough to keep SAP on it’s toes.

But then there’s this midmarket business, the elephant in the room neither company seems to want to talk about. Microsoft is serious about Dynamics, and they’re starting to get nods of recognition. But SAP is betting hard on A1S, the upcoming on-demand ERP solution targeting the niche of customers that fall between the already existing SMB solutions BusinessOne and All-in-One. Furthermore, SAP made the public commitment that it will nearly triple its customer base by 2010 — a goal that puts it squarely on a collision course with its friends in Redmond. Indeed, as 2010 and the inevitable SMB surge SAP needs in order to hit the magic 100,000 customer-mark draws near, I predict considerable friction at just about the same time Duet 2.0 rolls out.

But for now, everything is peachy. Kumbaya, and so on.

Matt Danielsson
Editor

Sapphire 2007 quick takes

Sapphire has been a little odd this year. Not just because Shai Agassi quit and left a sizable keynote spot open (since filled by Philip Lay, managing director of The Chasm Group Advisors,) but because of the uneven pacing. Rather than start with a big bang with all the key announcements on day one, most of the good stuff was withheld until the second day when Henning Kagermann finally took the stage.

But let's not complain too loudly; there were some interesting tidbits to be found. For example, Harmony is an internal collaboration tool that help SAP workers workdwide connect today. It's not unlike IBM's Lotus Connections, and Jeff Nolan said he covered Harmony last year, but we got a glimpse of what's in store for later this year when regular users get to play with these features… And judging by the application product demo, it's pretty darn slick. Assistant Editor Eric Samuels is on the case and hope to have more details on this shortly, so stay tuned.

Another point of interest was SAP and Microsoft's deepened partnership regarding Duet. We've long said Duet is promising, but a tad light on features. If the promises made here today hold water, that may soon not be the case as we look towards Duet 2.0 in 2008 and even Duet 3.0, slated for the next release of SAP's business suite (which will also include Microsoft's next gen Office, including Sharepoint). But for the more immediate future, Duet 1.5 and its Q4 2007 release seems to be the big game in town.

Speaking of Duet, one perhaps less than earth-shattering but notable announcement was the inclusion of Duet as a pre-loaded feature on HP ProLiant servers. There are no new features or clever synergies in play, but it seems like a case where ease of use and availability could make a big difference in helping Duet dig its heels in over time. 

Read Sapphire 2007 quick takes, part 2 here.

Matt Danielsson
Editor

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

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

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

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 

SAP under fire: Axel responds

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

SAP under fire: Axel Angeli on why 2007 will be tough for SAP

Axel Angeli is a veteran SAP guru with a reputation for brutal honesty about the ERP market. You probably saw his predictions for SAP trends 2007 the other week. Well, Axel had more insights to share about what's going on in the SAP world, so we gave him the opportunity to write a guest editorial! Also don't miss the follow-up columns SAP under fire: Axel responds and SAP under fire: Axel speaks out on what SAP should do next.

The broad strokes
For SAP AG, the year 2007 will be the most critical one in the recent history. While the company is still working on revamping its product line, the competitors are preparing to attack. While the ABAP engine makes slight progress, the ERP components still wait for many enhancements requested by customers. This negligence will play well into the hands of SAP challengers, mainly Microsoft with its Dynamics AX, the latest version of AXAPTA.

Not surprisingly, SOA will continue to be the driving subject in IT as companies begin to have a clearer vision of SOA benefits and governance and they start XI implementations in masses, driving the market into a proper shortage in XI consultants.

CRM and BW are fairly saturated so the business is ready to concentrate on another trend topic: the Supplier Relationship Management (SRM) field.

Looking beyond SAP, we see a steep incline in interest for Knowledge Management (Content Management Systems, CMS) and collaboration tools for project management, appliances and Open Source Public License solutions.

SOA rising
2007 will be the year of the practical break-through of the Service Oriented Architecture. While 2006 was governed by SOA governance concerns, I expect a great number of real life implementations to take place. SAP marketing did too good work here. The number of companies that have scheduled XI implementations is rapidly growing — a development that might bring SAP into trouble when it comes to support them all. XI is still not mature enough to be an out-of-the-box solution. The product kernel is widely stable but there are still missing precautions to cope with data affluence and adapter misbehavior.

These problems can now be circumvented by using safe implementation practices and sober asynchronous architecture, but the number of experienced XI architectures is extremely sparse and education in best practices of SOA has hardly started. Given that middleware XI projects are likely to be mission critical, this situation will mean heavy sea for SAP and give a chance to competitors to step into the gap. As of today, XI implementations are fine but in heavy-duty solutions an architecture is good advice if XI is complemented with some best of breed tools like IBM MQ as message store, Seeburger or SmartEDI for any EDI solution and relying on Windows framework as an adapter engine for everything beyond ODBC/jDBC.

ERP status quo
In the ERP area, there won't be tremendous changes this year because companies are mainly occopied with SOA issues or with upgrading and consolidating their current installations. Nevertheless, SAP will see its first serious challenges. Microsoft AXAPTA has loaded their arsenal to attack the market shares of SAP in the higher end of the SMB market benefiting widely from the intransparent pricing policy of SAP's SMB approach.  

Content Management gaining importance
Content and knowledge management has been neglected for a long time.

With the growing number of Internet literates, there will be an increasing insight that Google-like search engines, agile document management systems like Wikipedia, blogs and shared data repositories are precious tools for project management as well.

When you look for any kind of information today, you look it up in the Internet via Google, Yahoo, A9 or Wikipedia — and in most cases, you find a satisfying solution. The document management within companies, however, still takes place in the file system. Documents are distributed via email and finding back information is normally a nightmare. But now Internet technology reaches the intranet as well.

Google gave it a start with its enterprise version of the search engine. It comes preinstalled and configured in a hardware blade server that simply needs to be connected to power and a network and it starts spidering the documents within the reach in the intranet. From there on you have Google search functionality on the internal documents. SAP will use its advantage that its software is already ubiquitous in enterprises to present the solution manager and its knowledge management as an alternative. But the appeal of the plug-and-play offer of the Google appliance will be hard to beat. From the pure software side, Microsoft SharePoint will be an honest contender to SAP KM and EP.

Editor's comment:
Do you agree with Axel's assessment? Did SAP drop the ERP ball? Is Microsoft poised to give SAP a hard time? Are we at the beginning of a CMS boom? Will there be happy days for XI consultants this year? Sound off on these issues to win a book bundle:

• SAP xApp Analytics
• Designing Composite Applications
• Job Scheduling for SAP

One lucky winner takes all, so send your thoughts to mdanielsson@techtarget.com today.
UPDATE: Rob Ericsson from L10 Systems is the lucky winner of the book bundle. The raffle is over, but we're always interested to hear your opinion so feel free to keep sending additional comments.

Matt Danielsson
Editor