SAP leverages Oracle, PeopleSoft confusion

Hoping to capitalize on the confusion swirling around competitors Oracle, PeopleSoft, and J.D. Edwards, SAP will unveil extensions to its product portfolio at its Sapphire user conference this week.

Slated for announcement at the Orlando, Fla., show are new versions of SAP’s CRM and SCM (supply-chain management) software that will be optimized to leverage the company’s NetWeaver architecture.

Walldorf, Germany-based SAP will also give a progress report on mySAP ERP, which was announced in March, detailing how its architecture facilitates server consolidation.

SAP will also announce vertical solutions for SMBs (small and midsize businesses) in the high-tech industry, wholesalers for the company’s All-In-One ERP bundling, and new channel partners for the SMB market.

Taking the high ground amid Oracle’s hostile attempt to acquire PeopleSoft, Bill Wohl, an SAP spokesman, argued that the upgrades build the company’s case as a consistent player. “[Consolidating] companies take their eye off the ball with customers, [and] that’s exactly what we are not going to be doing,” Wohl said.

But SAP cannot afford to be complacent. Boston-based AMR Research reports that the enterprise application market will grow only 3 percent this year. A recent survey by Boston-based Yankee Group reveals that 65 SAP ERP users, which average $3 billion in revenue, have expressed little interest in deploying the latest versions of SAP’s J2EE application server, ERP offering, or the NetWeaver architecture, said Jon Derome, an analyst at Yankee Group.

It seems users are more interested in kicking the tires. “I need to gain an understanding of NetWeaver and how it could be used in my enterprise … because of our plan to create a seamless integration of our value chain,” said Paul Martin, CIO of Rexam Americas, a Chicago-based beverage-can manufacturer that is standardizing on all of SAP’s ERP modules.

The new versions of SAP’s CRM and SCM will be among the first enterprise applications to fully feature and leverage the NetWeaver platform, the company’s enterprise services architecture for delivering Web services to enterprises.

The Java- and .Net-compliant applications will offer vertical solutions tailored for specific industries.

“CRM and SCM are focused on leveraging NetWeaver to either sit on top of competitors’ solutions or legacy systems,” SAP’s Wohl said.

Because NetWeaver is designed to allow enterprises to drive a business process across an often disparate underlying infrastructure, it is ideal for leveraging multiple applications to serve customers, said Darc Dencker-Rasmussen, vice president of SAP’s global CRM initiative.

“To serve a customer, you use every part of your enterprise. You need to use a large range of applications,” Dencker-Rasmussen said.

A critical agenda for SAP at the show will be detailing how it will develop its customer- and partner-facing initiatives, said Sheryl Kingstone, senior analyst at Yankee Group.

“A lot of those companies don’t think of SAP for customer-facing or partner-facing initiatives,” Kingstone said. “If they start focusing more on xApps and articulating the value of NetWeaver, … they could have a play at the edge of the enterprise. [SAP needs] to execute on that and show how that is being used. Right now, it is more about ’market-tecture.’ They haven’t illustrated any customer successes.”

Meanwhile, Pleasanton, Calif.-based PeopleSoft has upgrades cooking despite the acquisition talks. Later this year, PeopleSoft will introduce the first of its Business Process Integration Packs. The first module will connect PeopleSoft CRM to SAP Manufacturing.

More integration packs will follow as part of its AppConnect Web services strategy, in which applications are componentized to improve integration and analysis capabilities. The goal is to extend analysis from business analysts out to all corporate users.