SAP (NYSE: SAP) is expected on Monday to ship a third “enhancement package” to its ERP (enterprise resource planning) application, with new features focusing both on core functionality, such as financials and procurement, and functionality aimed at verticals like the retail and manufacturing industries.
The release also has more than 50 “enterprise services bundles.” These are sets of existing SAP ERP service interfaces, packaged in various ways to address specific business processes such as order-to-cash, the company said.
The vendor doesn’t charge existing customers for enhancement packages, which stem from a strategy shift it announced in 2006. Instead of issuing major ERP platform releases every 12 to 18 months, it is parceling out incremental updates to the current core platform, SAP ERP 6.0. According to the company, 4,000 implementations of SAP ERP 6.0 have gone live since January 2007.
Given the “historically painful” process of implementing an ERP, it is wise for SAP to move in this direction, said Marc Songini, an analyst with Nucleus Research, by e-mail on Friday.
SAP’s rival, Oracle (NASDAQ: ORCL), is also basing its Fusion strategy around pain-free upgrades, making it a competitive play as well, he said.
The move is also a good way for SAP to preserve its installed base, he added. “If you have a choice between the agony of re-implementing SAP or turning to a new vendor such as Oracle or Lawson, you might be tempted to jump ship. But if you’re already on SAP, know it warts and all, and want to keep that investment, and SAP is making it easy to get new features without a rip and replace, you won’t be as tempted.”