SAP Watch

January 31, 2007  9:07 PM

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

Matt Danielsson

January 29, 2007  10:11 PM

SAP trends 2007, part three


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 today!

Matt Danielsson

January 26, 2007  7:01 PM

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 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

January 19, 2007  12:17 PM

More on retail trends with SAP exec Rick Chavie


NEW YORK — I made the four hour drive (no traffic, two Dunkin' Donuts stops) from Boston down to the National Retail Federation conference at the Javits Convention Center in New York this past week. It was my first time, and it turned out to be quite the exhibition, with over 16,000 attendees and 520 exhibitors. All the usual suspects showed up, with Microsoft, IBM, Oracle, and SAP occupying large booths at the four entrances to the show floor.

Oracle bested SAP in the snacks department with a wide array of choices and coffee available all day, although they were all self-service offerings. SAP boasted a two-level booth, definitely the most, um, vertically focused display at the conference.

I had a chance to talk with a couple executives in the loft area of the SAP booth, including Rick Chavie, SAP's senior vice president for trading industries. We ran a Q&A with him on earlier this week. Here are a couple additional topics that didn't quite make the cut:

Chavie on some issues in the retail market that are especially interesting:

One interesting thing is that retailers are looking to get all their common data into a system and optimize against it. So, they're asking how to take all their multi-channel, multi-national, multi-format data, do meaningful calculations against that data and execute to avoid common problems like having lots of inventory piled up for all the different segments we're going after.

We also want to build tech around trends — customer and product. Take the music industry for example, where things can spike and collapse very quickly. How can you manage all of that volatile product behavior, and at the same time, how do you identify products that are going to succeed, very early on?

When you factor in that 90% or 95% of new product introductions tend to not succeed in their first year from a profit standpoint, it's a lot of important choices for a retailer to make. So they have to be able to make very quick, informed decisions. In order to be successful, retailers have to be able to find that differentiated edge and scale up very rapidly.

Chavie on more of what to expect from SAP going forward:

Another thing we're looking at is around the multi-channel, multi-industry model of how SAP develops not only capabilities, but explains how to enact scenarios across channels and bring solutions into a company in ways that they didn't experience in the past as they look to grow.

Chavie on what international retail customers are looking for:

What they're looking for in Europe is to go into emerging markets further east — whether that's Russia, or the Middle-East, or wherever — and they need to be able to adapt to the local environment.

If you look at Asia-Pacific, they're looking for a lot of best practices, especially in India and China. They want to import best practices right away, because it's tough to find the management talent required to grow as quickly as they would like. India, since it is such a wide open market, is also looking for new models.

Jon Franke
News Editor

January 17, 2007  3:43 PM

The SAP Jobs info center is back


Looking for ways to get your SAP career in gear? Check out the SAP Jobs info center for tips and advice on how to break out of the rut. After a holiday break we're back with fresh articles, tips and answers to common challenges. For example:

Stay with permanent job or move to consulting?
Should you stay with a safe, permanent job, or spread your wings as a consultant for more risk and potential income? It's a classic dilemma — get SAP career guru Jon Reed's take on the matter here.

How do I keep my BW job from being outsourced?
Will getting expertise in BW help a SAP professional avoid the outsourcing ax? Yes, if you go one of two specific paths, according to Reed.

There's plenty more where these came from. Check it out today!

Matt Danielsson

January 11, 2007  3:36 PM

SAP trends 2007, part two


We recently asked veteran SAP guru Axel Angeli for his predictions of the major SAP trends in 2007. Now it’s time to turn our attention to Mark Smith, CEO at Ventana Research, for his take on the matter.

SearchSAP: What’s the biggest SAP trend for 2007?

Smith: The biggest trend is that SAP is moving to advance its use of Analytics and will evolve into offering its Customer Performance Management functionality across finance and operations management. These new advancements in applications and capabilities will become essential for SAP to maintain relevance with senior executives but to also help customers derive more value from existing investments. With a foundation year of new applications in Analytics and now an investment and focus in Performance Management, SAP is recognizing the importance of supporting not just the business processes but the management processes that can deliver improved results and effectiveness of organizations.

SearchSAP: Do you see any additional developments to keep an eye on?

Smith: SAP is moving to drive more value in its applications through significant advancements in the process and event drive architecture of SAP NetWeaver. The movement from transaction-centric architecture and systems to event-driven can help organizations move toward more automated and intelligent applications that improve the value and supply chains of industries. Integrated inter-enterprise processes are part of the next decade of innovations in ERP and CRM application suites and are essential to fulfilling the vision and promise of enterprise services architecture from SAP.

SearchSAP: What do you expect from SAP’s ERP competitors?

Smith: SAP’s key competition in ERP is Oracle, Infor and Microsoft at one level of mega application providers and then down to Epicor and Lawson. Each of these providers is working to maintain its existing customer base through new versions of its applications and new underlying application platform and capabilities. The places of significant new growth are in analytics and Business Intelligence and the underlying integration of these applications with information management needs of organizations. These application companies are continuing to build, buy and partner to expand these capabilities to stay competitive with SAP. In addition, the focus on Performance Management and new classes of applications for finance and operations is now advancing from many of SAP’s large and small ERP competitors providing engines of growth and value for existing and new customers.

Stay tuned for more expert insights of what 2007 has in store for the SAP world! Also, be sure to take Ventana’s latest survey on how to get the best metrics from SAP — there’s a Starbucks gift certificate in it for you, plus a chance to win an iPod nano.

Matt Danielsson

January 9, 2007  3:08 PM

SAP BPM slippage feedback


Our recent article about how SAP has slipped in Forrester's rankings for the integration-centric BPM market generated some pretty good feedback. One particularly interesting question that came up was:

"Do you think it is a better plan for SAP to create another EDI interface for NetWeaver rather than leveraging the SAP ecosystem and its proven technology and partners? Oracle typically builds or buys this type of solution because they are notoriously bad at managing their own ecosystem. Do you have high volume references for the Oracle 'hotpluggable' option and fusion middleware?"

We took this question to Ken Vollmer, principal analyst at Forrester and an author of the study. His response:

"The issue of SAP's approach to supporting EDI is one of cost and convenience for its customers. Most IC-BPMS providers offer native support for EDI in their core integration server and do not charge an additional fee for this capability. And since the EDI component is internally integrated, the customer does not have to worry about issues when upgrades are applied. That is not the case with most third party products, though we would expect the SAP/Seeburger partnership to be more integrated than most. Still one has to question why SAP provides native RosettaNet support, but does not provide direct support for the much more prevalent EDI standards. Microsoft has also been a long time holdout to providing native EDI support, but has now seen the light and will be including this capability in the next release of BizTalk Server. We believe SAP should do the same.

As far as high-volume references for XI is concerned, we have received a couple of references recently that have provided some indication that XI can perform in some high-volume situations when combined with clustering, load balancing and separation of synchronous and asynchronous messaging. However, it is accurate to say that we do not have a large number for references for either SAP or Oracle covering high-volume processing scenarios."

It will be interesting to track each company's rating in the IC-BPMS market if they are able to provide more high-volume references in the near future.

Jon Franke
News Editor

January 8, 2007  10:13 PM

SAP trends 2007, part one


Like everyone else, we at curious about what the new year will bring for SAP and the ERP market in general. To find out, we decided to check in with some prominent SAP experts on their predictions for the big trends in 2007 and beyond. First out is veteran site expert Axel Angeli.

SearchSAP: Let’s kick things off with the obvious question — what will be the biggest SAP trend this year?

Angeli: 2007 will be a year of consolidation for SAP. Major SAP customers will start real XI project implementations, which will lead to a tremendous shortage in XI skilled personnel.

SearchSAP: Do you see any additional developments that readers should keep an eye on?

Angeli: The new xMII – a kind of universal data adapter for SAP – will become a major point of interest for industry firms that need to attach laboratory and production machines to SAP. There will be a number of appliances around, set to deliver a great additional benefit for SAP users. Google gave it a start with the search engine for everybody, Castironsys, ActiveBit and National Instruments follow similar strategies. EDI will also experience a renaissance, once in combination with XI and Seeburger for SAP, but also in dropping EDIFACT and X.12 in favor of fashionable and easy XMLEDI. And SRM will gain in importance replacing BW and CRM as main business concerns.

SearchSAP: What do you expect from SAP’s ERP competitors?

Angeli: This is the year when SAP will pay the price for neglecting the further development of the core ERP elements. While SAP will fuel its marketing offensive for small and mid-sized businesses (SMBs), they will lose market share against Microsoft Dynamics, which is more dynamic in addressing SMB customers. We will also see the first examples of open source public license ERP suites entering this business area — that’s definitely an area to keep an eye on.

Also check SAP trends 2007, part two, where we pick the brains of Ventana Research CEO Mark Smith!

Matt Danielsson

December 19, 2006  8:02 PM

CRM, the savior of jobless SAP pros?


Gartner recently released a report on how they predict the SAP CRM situation will play out in the year ahead. From news editor Jon Franke's article:

"Through the end of 2008, 25% of CRM projects will be postponed or cancelled, according to Gartner. This rate of postponement and cancellation is largely a result of a CRM skill shortage — of consultants and systems integrators in particular — the Stamford, Conn.-based research firm says in a recent report."

Interesting stuff, especially in light of the lean times that seem to be more rule than exception in many areas of the SAP world today. There are plenty of ABAPers, Basis admins and consultants feeling the outsourcing pinch on one hand and the downward monetary pressure on the other. This probably won't change in the immediate future, so the question is should you consider a strategic move into the CRM space? And if so, what would that entail? 

Certification is not necessarily the only route to go, according to SAP career guru Jon Reed. It's more a matter of whether your current job can be mapped to the necessary CRM skills. For the Basis folks out there, you may be interested in this post about the options for a Basis guy looking to get into CRM. Do you need knowledge of the SD module to make it in CRM? Nope, says Reed; it helps, just like certification does, but the right background is infinitely more important. 

While the CRM route is by no means a universal path to SAP bliss, it may be worth a closer look. Check out Jon Reed's SAP career section to get a handle on how your current skillset may mesh with a CRM role, then visit the CRM topic section for the latest stories, tips and expert advice on SAP CRM.  

Matt Danielsson

December 18, 2006  2:36 PM

More on SAP jobs, ESA ecosystem


As mentioned last week, it can be tough to cram as much information as we'd like to in a 15 minute podcast. So, we followed-up with author Scott Campbell recently and asked a couple questions that didn't quite make the cut in last week's interview: We talked about SAP jobs a bit in the podcast. If you were looking for an SAP job in this market, what is/are the most important things you would focus on?

Campbell: There are plenty areas outside of core NetWeaver which will be in high demand in the years to come. One place we are focusing our recruiting around is Architecture and BPM skills, especially knowledge around IDS Sheer's ARIS technology. Another place where skills will be needed is around xMII. As I mentioned on the podcast, ideally we look for people with good broad solutions experience as we can always provide additional training in any specific tool or technology. Another area emerging in 2007 is for people with the NetWeaver Composition Environment experience (next generation of WebDynpro and CAF, …etc.). And of course from the functional side, anyone who understands BPX concepts and can apply their business knowledge with the friendly modeling tools supplied by SAP. These people should be in high demand. I guarantee our recruiters are always interested in folks with any of these skills. You had a whole chapter in the book on the SAP ESA ecosystem. How is that playing out?

Campbell: The ecosystem has been very successful and is growing rapidly. From a standards perspective SAP is investing heavily on key SOA standards and implementing them into their products. A great example of this is their contributions and investments around SCA and SDO as well as Java EE 5 implementation. In addition, SAP is working with other platform vendors to define and deliver the broader standards needed to create next generation SOA Infrastructure and composite modeling environments. The number of ISV partners are exponentially increasing and moving beyond Powered By NetWeaver solutions to create more certified composite applications. Expect to see a lot more of the partners to move from engineering to real implementation and delivery of solutions in 2007. This is good for SAP, good for partners, and really good for their joint customers. Lastly, the results of the SAP Enterprise Services Community are yielding real fruit and this effort remains very important as a place where partners and customers can contribute to the future service enablement of SAP.

If readers find follow-up like this valuable, we could see it becoming a regular blog item. To let us know one way or the other, email me at

Jon Franke
News Editor

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