• August 1, 2006
  • By Coreen Bailor, (former) Associate Editor, CRM Magazine

On the Scene: SAPPHIRE '06: SAP Continues Its Enterprise SOA Push

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Orlando may be a family entertainment mecca, but at SAP's SAPPHIRE '06 Orlando user conference, which hosted more than 15,000 attendees, enterprise services architecture (ESA) was the main attraction. ESA, according to SAP, is the combination of enterprise services and service oriented architecture (SOA). "The industrialization of software is upon us," said Bill McDermott, president and CEO of SAP Americas, in his keynote. "We're moving into a world of mass customization," he added, contending that the industry is moving toward component-based assembly, while industry-specific solutions are now being decomposed into smaller enterprise service repositories that all applications can draw on. The move toward an SOA makes the underlying platform and infrastructure a much more important and visible part of the solution for customers than in a traditional monolithic application environment, according to Dennis Gaughan, research director at AMR Research. "If SAP didn't refocus around ESA, which is the combination of their applications and the NetWeaver platform, they could risk being marginalized by the major infrastructure providers who provide the products that allow customers to build composite applications and orchestrate new business processes," he says. "ESA and related initiatives like Duet with Microsoft also present a big opportunity to grow revenue in their install base by providing more platform tooling like portals, BI, and integration, as well as ways to increase the number of users touching the SAP system, which drives licenses." McDermott also noted Duet, the Microsoft integration formerly known as Project Mendocino, along with SAP Analytics and SAP's CRM on-demand capabilities. Announced at the conference, CRM 2006s, a hybrid on-demand/on-premise CRM suite that allows for integration with SAP and non-SAP back-end systems, lets companies select the most appropriate deployment model for their needs, according to SAP. While the product will be available to initial customers this summer, the company expects to migrate its entire CRM offering to its hybrid model by 2007. About a week prior to SAPPHIRE, SAP announced enhancements to the SAP Sales on-demand solution (its first on-demand application unveiled in February), and introduced the SAP Marketing on-demand solution. SAP Sales on-demand solution now features account and opportunity management capabilities and new pipeline performance management functionality. SAP's marketing-focused on-demand offering centers on areas including campaign management and customer segmentation, and lead management. "We do not think that on-demand is a singular, pure play situation," said Shai Agassi, president of the product and technology group, during his keynote. "We think that you need to have the same processes, the same governance, the same data, the same experience on both on-demand and on-premise." Without question, SAP was late to the on-demand dance. Although target markets and capabilities vary, companies like Oracle's Siebel Systems, RightNow Technologies, Sage Software, and Salesforce.com have more experience in the space, and with the exception of Salesforce.com, they all have on-premise capabilities. However, "SAP is really only going after their core customer base right now, so they're not looking to sell CRM on-demand to a broader audience at this point," says Rob Bois, a research director at AMR Research. SAP also made a series of other announcements, including the global availability of mySAP ERP 2005, built on the NetWeaver platform, and the general availability of BI accelerator, an analytical engine codeveloped by SAP and Intel that's within SAP NetWeaver Business Intelligence. The company also announced its plans to buy Frictionless Commerce, a supplier relationship management (SRM) specialist with on-demand capabilities, and the completion of its acquisition of compliance solutions provider Virsa Systems.
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