Sunday, May 26, 2024

SAP Raises the Ante For Enterprise Software

Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.

SAP’s announcement of its NetWeaver technology platform heralds an important shift in the enterprise applications market that will have an impact not just on SAP but its competitors and some key partners as well.

The shift is in the details of a complex announcement that is almost too grandiose. But don’t be fooled by the potential scale of the NetWeaver announcement. SAP really has defined the future of enterprise applications and the platform on which they will be deployed. For the most part, SAP’s competitors will be hard-pressed to make a quick and comprehensive response.

An easy criticism of NetWeaver is that SAP is just bundling a lot of bits and pieces of what is already in its technology stack: a portal, an applications server, an integration layer, and business intelligence tools.

Sure, these and other pieces have been around for a while, but don’t underestimate the effort — or value — of putting them all together. NetWeaver isn’t just a piece of fancy packaging, it represents the rationalization of a tremendous amount of technology that has been floating around SAP for a number of years. This is truly a case of the sum of the whole being greater than the parts.

Enterprise Advisor Archives

IBM’s Baddest Move

Microsoft Turns Competitors’ Innovations into Gold

Siebel Satisfying? Depends On Who’s Asking

Will Plattner Ever Leave SAP?

The Future Of Enterprise Software (Again)

SCM is Dead, Long Live SCM

They Jail CEOs, Don’t They?

NetWeaver will have three important roles in the future of SAP and the enterprise software market. The first is that it will function as the platform for SAP’s xApps — the composite apps that SAP and its partners are building to fulfill the demand for applications that add value above and beyond what is available in the existing enterprise applications infrastructure. (See The Future of Enterprise Software.)

Commoditizing the Infrastructure Market

The second role is that it will help commoditize the applications infrastructure market. SAP accomplished this by pulling off a major coup: endorsements from IBM and Microsoft.

Why they got these endorsements is simple: IBM does billions in SAP-related business (even more now that they own PriceWaterhouseCoopers Consulting) and wants to make sure everyone knows that its heart and its wallet are intimately linked. Microsoft also does major SAP business, but Bill Gates’ video appearance at the launch was probably motivated more by what constituted the biggest and most important endorsement of .NET in the enterprise software market.

These endorsements help commoditize the infrastructure market for the simple reason that, at least among the Global SAP 20,000 — the market’s hunkiest user base — it really won’t matter whether the customer deploys .NET, Websphere, or some Java-based technology: NetWeaver will support them all. That basically takes the strategic value of the various infrastructure offerings down a couple of notches.

SAP’s probable pricing for NetWeaver will further contribute to this commoditization. Most of the NetWeaver technology is already free for and other applications customers. The only way to make NetWeaver ubiquitous in the market is to maintain this low entry point. In an open source world where developers can deploy applications on LAMP — Linux, Apache, MySQL, and PHP — for free, SAP can’t hang a lot of dollar signs in front of NetWeaver and hope it will prevail.

The third role will be to confound its competitors — at least for now. Most competitors lack a comprehensive technology platform like NetWeaver. And none, save Swedish vendor IFS AB, have made any significant effort towards xApp-like functionality.

xApps aren’t rocket science, but no one will be able to conjure up a competing strategy overnight. It’s harder than SAP has made it look.

Shai Agassi, the SAP board member in charge of the NetWeaver and xApps initiative, commented that the launch represented the efforts of thousands of developers to get NetWeaver ready and signaled the start of an effort by thousands of developers to make it a reality. The line got a laugh, but he wasn’t kidding. And that effort didn’t just include developers — SAP had to really rethink its entire raison d’etre as an applications and technology vendor in order to make it to this launch. Other competitors will have to do the same to stay in the game.

And they will, to be sure. It’s inevitable: SAP is just following the evolutionary curve of the applications industry a little more closely than everyone else. Expect the rest to follow as soon as they can. Or else.

Subscribe to Data Insider

Learn the latest news and best practices about data science, big data analytics, artificial intelligence, data security, and more.

Similar articles

Get the Free Newsletter!

Subscribe to Data Insider for top news, trends & analysis

Latest Articles