SAP To Talk Up NetWeaver, New Delivery Models

ERP giant SAP this week will seek to prove that it's been true to its word on delivering "Enterprise SOA."

"We've talked about it since we talked about NetWeaver in 2003. It's been a strong and steady roadmap, we have not wavered," said Bill Wall, vice president of product and technology for German software giant, which has U.S. headquarters in Newtown Square, Pa.

Virtually every business software company has tried to show it can offer up-to-date Web services that extend and preserve existing application investment. "Enterprise SOA" is SAP's take on that with NetWeaver serving as the underlying platform which embraces both Java and .Net skillsets.

For the several thousand SAP customers converging on Atlanta this week for Sapphire 2007, SAP will tout NetWeaver as platform for partner development in certain industry-specific verticals. The company will also talk up its focus helping customers deal with corporate governance issues, according to Wall.

SAP will talk up a business unit launched last year that focuses on managing risk and compliance.

Sapphire is taking place just weeks after the unexpected exit of Shai Agassi, the top exec that many saw as the heir to SAP's crown.

As it stands, SAP is run by Chairman Hasso Plattner, CEO Henning Kagermann, and deputy CEO Leo Apotheker. Kagermann's contract extension was announced just before Agassi's departure hit the wires.

Wall said the company had been forthright about Agassi's decision. "You don't easily replace Mr. Agassi, but the very people behind Shai are the same people in charge today. He laid out an aggressive agenda, which is very much in place, we're executing against it, and people running it for him have stepped forward."

The company is also navigating the tricky shoals between on-premise software and software-as a service. Company execs have talked—not very specifically--about a new hosted version of ERP, code-named A1S, that will target companies smaller than those who typically run the big-iron MySAP and smaller mid-market companies running SAP's All-in-One.

Wall pointed out the company is not out in the cold when it comes to SaaS. "For us, 'on demand' is not just about CRM, but also about SRM [supplier relationship management] and sourcing—we have solutions there some of which can be delivered on demand," he noted.

SAP, like other legacy business software players including Microsoft and Oracle, is weighing the SaaS mode of delivery. And all of those players are hedging their bets. Oracle fields Siebel CRM On Demand. Microsoft is working on a self-hosted CRM Live and already has partners hosting its ERP and CRM products for customers.

All these players are anxious to show that SaaS is one of several delivery models they can facilitate. Newer services-oriented players like Saleforce.com and NetSuite hope their early-mover advantage will sustain them as the older vendors jump into the fray.

"There's a lot of excitement generated by small niche players in the on demand space. We think the discussion is about customer requirements. [It's] one way to deliver software but not the only way. We don't think of on demand as a panacea or the end of software as we know it," Wall said in a not-so-veiled swipe at Salesforce.com's marketing language.

Next: What Are SAP Partners Saying?

Korey Lind, president of Third Wave Business Systems, Elmwood, N.J., is interested in how A1S develops.

"It would provide an interesting alternative to running the stuff in house," she said. "Even if SAP runs it, the opportunity there is the same as it is now, only we wouldn't have to worry about customer servers crashing. We'd help customers decide if it's right for them and help with consulting to get them running. SAAS doesn't' mean there's no consulting or implementation work."

Forrest Koch, CEO of The Omega Group, a SAP Business One partner in Portland, Ore., is also keeping a watchful eye.

If customers start flocking to a hosted SAP offering "would be no problem for me [but], I don't see that happening," Koch said. "We've looked at the [Application Service Provider] model, they keep changing the name, but it's the same thing [as SaaS] ... We see NetSuite doing it, Intuit trying to do it, Accpac but when you actually sit down and look at the costs for mid-market organizations, they don't want it. If someone buys Salesforce.com, they also will need some customization and that ends up costing quite a bit. When I talk to Salesforce.com users, they want to integrate it to Business One and when they discover what a huge task that is, many of them look at the CRM capability within Business One.It is not as robust as Salesforce.com but they understand the cost involved in integrating it," he noted.

In short, mid-market companies are more interested in something that may be less functional but more integrated with their other processes, he said. SAP provides that in Business One, he said.

At Sapphire, SAP will also talk more about another delivery model-- application "appliances,". These offerings bundle the necessary hardware and software fine-tuned for specific uses. As virtualization and other cost-cutting trends continue, customers want to pay solely for the hardware and software they use, not for associated overhead or "shelf ware" that sits untapped on their machines..

SAP has already dipped its toe in this water with its Business Intelligence Accelerator Appliance , developed with help from Intel, IBM, and Hewlett-Packard.

In this instance, the business intelligence bits are pre-loaded on blades and the whole unit plugs into the data warehouse. "We take our business warehouse and make it run hundreds of times faster and at huge cost reductions," Wall said, adding that the accelerator "heralds the serious arrival of in-memory technology."

Indeed, Oracle and others have watched the in-memory movement with interest, oracle buying TimesTen. IBM may or may not be eyeing ANTs for its in-memory talents. SAP is using home-grown in-memory technology, according to Wall.

Virtually everyone coming to the show expects fireworks vis a vis Oracle, which has spent upwards of $20 billion building its apps arsenal in the past two years with its PeopleSoft, Siebel Systems and other deals.

Customers and reporters arriving at Atlanta's airport Sunday were greeted with humongous red-on-white signs touting Oracle applications.