SAP shows way out of strategic straitjacket

Business software vendor SAP is expanding has significantly expanded its strategic horizons, moving rapidly beyond being strictly an applications provider to becoming a broad-based platform provider on the strength of its recently unveiled NetWeaver integration software.

NetWeaver provides a Web services architecture on which to build and run IT systems that link business processes from SAP and non-SAP applications alike.

SAP business and technology executives currently undertaking a 50-city global tour in which it is laying out the nuts and bolts of how customers can use NetWeaver and to discuss the opportunities that the technology presents to customers and partners.

The tour, which includes a stop in Johannesburg in July, will highlight NetWeaver's role in helping customers execute flexible business strategies and drive business change while reducing IT costs and complexities.

SAP offers a well-articulated strategy for support of the new architectural model, and all of its products and strategy are designed to establish the company as a cross-platform web services player.

"It's a huge enabling device for the SAP installed base and a spearhead into our competitors' installed base," said Claas Kuehnemann, CEO of SAP Africa.

Already attracting attention from SAP's vast global client base, NetWeaver is also winning the approval of analysts like Yvonne Genovese, vice-president and research director at Gartner Research.

"Most companies today have spent a lot of money on software and say, 'if I have to rip out my entire infrastructure and replace it with this new stuff, forget it. I don't have the money to do that'," Genovese said earlier this year.

"Gartner recommends to customers to put in place a strategy to work with vendors who offer a vision for delivering an integrated platform that supports a service-oriented architecture that will allow them to accomplish the change in a slow, evolutionary manner while leveraging existing investments. This strategy supports customer demands as the platform can be changed and built onto fairly easily once it's established."

SAP spokespeople are similarly enthusiastic about NetWeaver, using terms like the "new generation of enterprise software".

SAP Africa solutions manager Alvin Paules says that with business applications written on different platforms, many companies have found themselves in what he calls a "strategic straitjacket". Odds are that the complexity and costs of integration have prevented them from exploring certain initiatives, even if they would have gained a real operational or competitive advantage.

"By simplifying integration and creating an open technology environment, SAP NetWeaver allows companies to lower their total cost of ownership (TCO) and expand their capabilities more quickly in any direction," said Paules. "So instead of simply maintaining the status quo, they can focus their resources on innovation that enables them to grow and increase their competitive-edge."

NetWeaver will serve as the foundation for all SAP application solutions development in the future, which includes mySAP ERP, the successor to the client/server-based R/3 suite. For the thousands of SAP customers still on R/3, NetWeaver is available at an extra cost. SAP customers who are licensed for mySAP Business Suite will have access to most of the NetWeaver integration stack as part of their existing licences.

Built on a service-oriented architecture, the recently-released NetWeaver 2004 is the first version that integrates the platform's 10 components, which include a portal, an exchange infrastructure, a Web application server, a composite application framework and business intelligence software.

NetWeaver 2004 brings a handful of new functionality, including a new business process engine in XI, the ability to integrate radio-frequency-identification data into SAP software, and full support for Web-services-based provisioning and consumption in the Web application server.

Paules says NetWeaver addresses SAP's commitment to a Web services architecture, reflecting the importance of not only internal heterogeneous environments, but the need to connect with customer/partner/carrier systems.