Where SAP is going

ORLANDO—One of the general anxieties at this or any other SAPPHIRE is about SAP’s strategic direction. The perennial question for customers old and new, as well as for prospects, is: “Where is SAP going, and how will it impact me?”

A new report from AMR Research’s Jim Shepherd offers specific insight into where SAP is going until at least 2013, and offers educated predictions about what’s going to happen after 2013. Here are some of the big takeaways from Shepherd’s brief:

Product Release Strategy: “SAP will spend much of 2008 aligning the release schedule of the major products within the SAP Business Suite: ERP, CRM, PLM, SCM, and SRM. Beginning in 2009, it will begin shipping enhancement packages for the Business Suite. Because of the synchronization effort, SAP ERP 6.0, NetWeaver 7.0 and all the core applications in the Business Suite will be covered by mainstream maintenance until March 2013, with extended maintenance through 2016.”

SAP Growth Strategy: One of SAP’s growth plans is to increase account penetration. Since this is such a high priority for SAP, existing customers can expect to be subject to increasing sales attention. The disadvantage is that the SAP sales organization will push some customers to buy products they may not need. The advantage is that customers who really want new products can hold out for better terms from SAP, knowing that SAP is very eager to make these kinds of sales.

SAP Platform Strategy: “The reality is that SAP customers have to use NetWeaver because their applications won’t run without it…” Since you’ll have to buy NetWeaver anyway, get acquainted with the optional functionality, including business intelligence, integration capabilities and the portal. There’s a generic parallel here with risk management. Lots of enterprises bought risk management functionality specifically for SOX, but took advantage of additional features to build out a fuller risk management capability. Similarly, customers who buy NetWeaver to run SAP applications can use the platform for a whole lot more.

SAP Industry Strategy: SAP wants to expand into new industries. This is good for customers who fall outside of SAP’s normal comfort zone, as SAP is highly motivated to work with them on product strategy and development. The losers may be SAP’s existing customers in areas like manufacturing, which SAP has already nailed down and will not be paying as much attention to, going forward.

SAP Product Strategy: SAP is moving to accommodate the Software as a Service (SaaS) paradigm with Business ByDesign, which is now delayed because of compatibility issues with NetWeaver 7.1. However, the market can expect SAP to keep going after SMB accounts with SAP ERP 6.0 and SAP Business All-in-One (for upper midsize companies), SAP Business ByDesign for the lower midsize segment, and SAP Business One for small businesses.

Demir Barlas, Site Editor