SAP adds Cisco to partnerships

SAP made a slew of announcements at last month’s annual Sapphire conference, including a strategic alliance with Cisco Systems.The focus, the company stressed, is on integration through service-oriented architecture (SOA), based on the next-generation SAP Business Suite.

The upcoming version of Duet 2.0, an application that lets Microsoft Office users have visibility into the mySAP enterprise resource application suite, is planned for the end of 2008, partners and customers learned.

In 2008, Duet 2.0 will integrate Microsoft SharePoint, said Leo Apotheker, president of customer solutions and operations with SAP AG during a press Q&A session. Following that, SharePoint will become a foundation element in Duet 3.0.

Duet 3.0 is expected to be released soon after new versions of the SAP Business Suite applications and next-generation Microsoft Office software, including SharePoint Server.

Apotheker also said SAP will look at new ways of pricing software, but added that “aggressive pricing” from other market players isn’t going to hurt the firm.

In other news, SAP entered into an agreement with Cisco to jointly develop “a new breed of business solutions that will transform how applications and networks interact.”

The two vendors plan to develop business solutions around SOA and integrate business context into the network using SAP’s NetWeaver platform and Cisco’s Service-Oriented Network Architecture (SONA).

SAP also announced it is working with Microsoft and HP to assemble servers pre-packaged with Duet so customers can get a head-start on the application.

SAP expects to see major uptake in enterprise SOA, Henning Kagermann, CEO of SAP, told reporters. “Enterprise SOA is an evolutionary way to architect IT for business network transformation,” he said, as it will support change, collaboration and integration at the speed and cost required. SAP will integrate SAP ERP with PeopleSoft HR and Siebel CRM, and promote an open cross-industry platform, he added.

“We decided not to develop industry solutions isolated [from one another],” he said in his keynote. “This doesn’t work in the networked world. You connect to partners in different industries and activate the best processes of these different industries.”

In the Canadian market, if companies are still focusing on commoditized processes, they’re missing out, Joel Martin, vice-president of enterprise software with IDC Canada, said in an interview.SAP’s strategy is to provide horizontal workflow, leveraging SOA to free people up for more strategic processes, he said. “That’s where a partner could come in to offer industry apps.”

SAP’s challenge, however, will be to crack the less-than-$500 million customer that uses small, niche apps. And those apps are being bought up right now by the likes of Oracle.

SAP has to build out its partner network for this market, said Martin. However, some of its traditional tier-one partners could find it harder to get down to that level. SAP also has to deal with some brand stigma from smaller customers, since SAP is often perceived as an enterprise player.

In 2005, SAP was the No. 1 ERP vendor in Canada, followed closely by Oracle, but together they make up less than one-quarter of the market, according to IDC Canada. The “other” category makes up a whopping half of the market.

Oracle has increased its market share through a myriad of acquisitions. “It’s assumed the challenge, and probably the pain, of getting disparate systems to talk to each other,” he said. “If that’s not happening, how do you get competitive advantage?” SAP, on the other hand, is saying that it’s not playing that game.

The best of breed of any product may seem good, but there’s a requirement for these things to sit on a common platform, Nenshad Bardoliwalla, senior director of CPM Solution Management with SAP Labs LLC, said in an interview.

Otherwise, he added, they can’t do business.

There’s more emphasis on compliance, he said, as well as an emphasis on a nuanced concept of risk. There’s risk of non-compliance, but also risk in terms of opportunity – or what risks should be taken by the organization.

With the Cisco alliance, he said, there will be an alignment of the technical stack. By combining risk at an application and services layer, this gives users the ability to look at risk all the way through the stack. All SAP applications sit on NetWeaver, he said, and by having a common technology platform, there won’t be siloed capabilities.

“Line-of-business managers are spending time on integration instead of strategy,” he said, adding they’re no longer being strategic. “Integration is not a value-added activity.” SMBs, in particular, can’t afford to patch together point products. “They’re trying to stitch together a bunch of squares and circles and rectangles,” he said. “Someone’s paying the cost of that integration: The customer.”

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Vawn Himmelsbach
Vawn Himmelsbach
Is a Toronto-based journalist and regular contributor to IT World Canada's publications.

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