SAP adds Cisco to partnerships

ATLANTA – SAP made a slew of announcements at this week’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.

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

In 2008, Duet 2.0 will integrate 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.

Apotheker also said SAP will look at new ways of pricing software – but that “aggressive pricing” from other market players wasn’t going to hurt SAP.

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).

On Monday SAP 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 AG, 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 to open the conference. “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, said Joel Martin, vice-president of enterprise software with IDC Canada, in an interview with CDN.

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.

For SAP, said Martin, it’s all about building out its partner network for this market. 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 number-one 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 like a good thing, but there’s a requirement for these things to sit on a common platform, said Nenshad Bardoliwalla, senior director of CPM Solution Management with SAP Labs LLC, in an interview with

CDN.

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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Jim Love, Chief Content Officer, IT World Canada

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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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