SAP’s Co-CEO’s Talk Strategy, Oracle and On-Demand

PALO ALTO, Calif. – SAP’s recently appointed co-CEOs had a coming-out party of sorts here at a media event at the enterprise software giant’s Silicon Valley offices. Former SAP CEO Leo Apotheker resigned unexpectedly last month after only nine months in the top spot.

Apotheker’s replacements, co-CEOs Bill McDermott and Jim Hagemann Snabe (based in the U.S. and Germany, respectively) fielded questions about SAP’s (NYSE: SAP) strategy for about an hour, mainly dealing with delays in the company’s Business ByDesign software and competing with Oracle (NASDAQ: ORCL).

Business ByDesign is SAP’s big play into the fast-growing, on-demand software market that Salesforce (NYSE: CRM), Google (NASDAQ: GOOG) and others have championed. SAP said it has 100 customers using a test version of the software, now in version 2.0, and plans to release version 2.5 this summer as its first release for general availability.

McDermott conceded the product’s taken longer to bring to market than SAP planned, but he said the wait to get it right will be worth it. “SAP does things that are really hard to do, everything from supply chain to cash management and CRM,” he said, noting other SaaS providers aren’t nearly as comprehensive and don’t integrate as well.

“The best of breed doesn’t breed so well,” he quipped.

Both McDermott and Snabe also claimed SAP has a distinct advantage over archrival Oracle, which has grown largely through acquisitions versus SAP’s approach of mainly extending its core products internally.

“Our customers don’t need a lot of middleware to make things work together,” said Snabe.

IDC analyst Michael Fauscette said SAP is at a crossroads and has to start delivering on Business ByDesign. “They have a long way to go with SaaS and slides don’t sell, they have to deliver,” Fauscette told InternetNews.com, taking note of the many presentations SAP has made on Business ByDesign. “They have to show a real coherent strategy at Sapphire [SAP’s big user conference set for this May].”

But McDermott said SAP already has a clear vision to provide its traditional on-premise solutions, along with on-demand and “on-device” solutions (SAP’s term for mobile support) and “orchestration” to make all three easy to manage.

“The last five weeks have been great fun,” said McDermott, noting the time he and Snabe have been co-CEOs. “Having 95,000 customers is a great asset and we have almost 50,000 people in the company fired up and ready to go.”

SAP officials also said they planned to continue development projects using Java despite Oracle’s stewardship as part of its recent acquisition of Sun.

“We’ve made substantial investment in Java and have some of the best performing apps on the planet,” said Vishal Sikka, SAP’s CTO. “We fully expect it to stay an open and thriving platform.” He also noted SAP has been a reseller of Oracle’s database for years and is used to working with the company considered its biggest competitor.

David Needle is the West Coast bureau chief at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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