SAP adds to hosted roster with supplier management software

ORLANDO – SAP will expand its hosted software offerings by adding a supplier relationship management product, its second on-demand service.

It will come through the company’s acquisition of Frictionless Commerce, a Cambridge, Mass.-based privately-held provider of SRM applications for large and midsize firms, SAP said at its annual Sapphire conference here. No purchase price was announced.

No date was set for the debut of the product, to join SAP CRM On Demand.

However, SAP executives said the channel should not be concerned that the German-based software giant is expanding into directly providing software.

“Over time every offering will be made available through all of our capabilities, direct, indirect, VARs, resellers and ISVs,” said Leo Apotheker, president of SAP customer solutions and operations.

Later, Emile Lee, an SAP Canada spokesman, said that partners will be able to sell CRM On Demand starting next year, although he didn’t have a date. In the meantime partners will be able to refer customers interested in the online service to SAP’s sales staff and will be compensated if it leads to a sale. The compensation will be worked out with the partner, Lee said.

Shai Agassi, president of SAP’s product and technology group, also told reporters and analysts that the company’s hosted services offer opportunities for the channel.

SAP CRM now comes in two versions, he said: On Demand, and a version that customers can buy and install on their premises. The two share the same code and can be linked through SAP’s services oriented architecture to give corporate managers access to information captured by both applications.

A manufacturer could use CRM On Demand for online customers and distributors, he said, while having the SAP CRM system internally. Because the two systems can be linked, retailers will be able to see customer information captured when they go online to research products.

“To do that you need a complete hybrid solution with an integrated platform, and VARS can create that kind of e-presence and the integration, Agassi said. That’s why I think this is a more exciting opportunity for VARs than a pure play (online software company) can offer.”

An estimated 15,000 SAP customers, partners, suppliers, press and industry analysts have gathered here to learn about the company’s strategies for the coming year.

Executives are heavily promoting its services oriented architecture, called enterprise services architecture (ESA), which it announced in 2004 will eventually be part of all of its products.

The company said it hopes to release 500 free enterprise Web services next month to enable NetWeaver users to create business processes faster than through conventional coding.

SAP CEO Henning Kagermann, said mySAP ERP 2007, which will have full ESA capabilities, will be delivered next year as promised. Also coming next year will be new versions of its NetWeaver integration and portal application, which will become what the company calls a business process platform, and a version of All-in-One on NetWeaver.

Kagermann also revealed a new rich client interface for mySAP it has been working on called Project Muse. Depending on the response it may replace the SAP client interface, he said.

Also announced here was a business intelligence appliance called a BI accelerator, which will be available from IBM and Hewlett-Packard on blade servers powered by 64-bit Xeon processors. It’s an analytical engine within NetWeaver Business Intelligence.

Finally, the company announced the availability of mySAP ERP 2005, with what it says are 300 enhancements over the previous version.

SAP executives are expected to tout SAP’s healthy bottom line. Last month, for example, the German-based firm reported estimated software revenues had increased 22 per cent in the first quarter of the year over the same period in 2005 to 434 million euros, although taking into account currency fluctuations that dropped to 14 per cent.

But software revenues in the Americas, which Kagermann said is “our growth region,” soared 47 per cent (30 per cent adjusted for currencies) to 228 million euros. Most of SAP’s revenues come from mySAP Business Suite and mySAP ERP, sold to enterprise-sized companies. That slice of revenue also includes their sibling, All-in-One, which comes in packaged versions sold by partners aimed at verticals.

According to Gartner analyst Yvonne Genovese, SAP is rolling in money “largely because Oracle’s messing things up so bad, not necessarily because SAP’s done anything great..”

Its plan to merge the ERP acquisitions of JD Edwards and PeopleSoft with Oracle E-Business Suite “will cause turmoil” with customers, she predicted, while SAP’s upgrade path for versions of its full enterprise suite is much smoother.

That may be one reason why in his remarks to the convention Kagermann emphasized that “customers want low-risk upgrades,” which he promised will happen through the use of a services architecture.

One message, delivered by Agassi, is that companies are moving away from buying best of breed products and towards suites like mySAP. Though Web services these customers can continue links to legacy applications, he said.

SAP will continue to set standards in enterprise services,” added Kagermann. “We want to be the leader in business process platforms and we will continue to deliver (industry) solutions, but we give customers choice.”

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Howard Solomon
Howard Solomon
Currently a freelance writer. Former editor of and Computing Canada. An IT journalist since 1997, Howard has written for several of ITWC's sister publications, including Before arriving at ITWC he served as a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times.

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