SAP Customers Find Refuge from ERP Market Turmoil

Customers say they're glad they can concentrate entirely on technology at SAP's TechEd conference, rather than wonder whether market consolidation will turn competing ERP applications into obsolescent orphans.

SAN DIEGO—SAPs TechEd conference here is proving to be an oasis of calm for corporate customers in an ERP (enterprise resource planning) software market that has been roiled by Oracles prolonged efforts to buy out PeopleSoft.

TechEd attendees said they were glad that they could concentrate on learning about SAP AGs products and application-development technologies rather than wondering whether the company would still be in business a year from now.

SAP has a definite advantage because it can focus entirely on Web services integration and building high-quality Java development tools for its line of ERP applications, said Kartik Lyengar, enterprise application services program manager at Wipro Technologies Ltd., a systems integrator in Bangalore, India.

Wipro has worked with all of the top ERP software vendors, including PeopleSoft Inc., J.D. Edwards & Co., Oracle Corp. and Siebel Systems Inc., among others, Lyengar said. Even if Oracle succeeds in acquiring PeopleSoft, it would face a huge task of integrating the product lines, Lyengar said.

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"For them to succeed, its a matter of bringing it all together," he said. Oracle would face an integration task that "could take possibly 10 years for them to complete," he said.

"If I was a customer, I wouldnt want to work with a vendor who had just acquired another vendor who in turn had recently acquired another vendor," he said, referring to PeopleSofts buyout of J.D Edwards in June 2003.

Meanwhile, SAP will be free to pursue its Enterprise Services Architecture, in which customers will work with its NetWeaver information-integration platform to access data stored in a variety of databases and applications scattered within an organization, Lyengar said.

With the rest of the big players consolidating, it will be hard for them to keep up with SAPs moves, he said.

But Lyengar said there was another reason why he was enjoyed attending the TechEd conference. "They have a no-marketing zone here–that is the best part," he said. He can attend technical sessions or observe product demonstrations without feeling that at some point SAP representatives are going to break into a sales pitch.

Is PeopleSoft running short on options and credibility? Click here for a column.

NetWeaver was what encouraged Troy Peck, a systems analyst at wireless networking equipment maker Symbol Technologies Inc., to attend SAP TechEd. Peck said he wanted to learn more about NetWeaver because its clear that much of the "programming that you do in SAP is going to move onto the Net."

Peck said that while it will take a few years to catch on in the market, he thinks NetWeaver will give SAP a significant advantage in using Web-based programming for application integration.

The availability of the SAP applications had encouraged Symbol to move away from using i2 Technologies Inc.s SCM (supply chain management) product, Peck said. The company found that the TCO (total cost of ownership) was considerably less when working with SAPs application suite than with the i2 standalone product, "so they went with SAP," Peck said.

Read more here about SAPs strategy in building support for NetWeaver.

The application-integration potential of NetWeaver also interested Aleksey Pnev, a new technology analyst at PerkinElmer Inc., based in Shelton, Conn. PerkinElmer, a manufacturer of life sciences analysis equipment and biomedical imaging systems, wants to use NetWeaver to develop Web-based applications that will allow customers to order products, check inventory and get order-status updates, Pnev said.

PerkinElmer is now using Oracle 11i financial and manufacturing applications, as well as SAP applications, Pnev said. The company has already integrated the Oracle and SAP applications by using the WebMethods Inc. middleware technology, he added.

But the company is planning to switch to SAP applications "several years down the road" because NetWeaver offers the potential for better application integration and customer-service capabilities, he said.

"Plus, supporting two separate ERP systems is not cost-effective if they are providing similar functions," Pnev said.

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