SAP Pursues On-Demand Model, BPP

By Renee Boucher Ferguson  |  Posted 2005-12-08

SAP Pursues On-Demand Model, BPP

During its annual Analyst Summit in Las Vegas this week, SAP AG outlined its development plans for the coming year—plans that involve an absolute-process view of the world.

That approach is central to the next version of SAPs NetWeaver integration platform, which with its release in 2006 moves from being a composition platform to becoming a true business process platform, according to SAP officials.

At the same time, SAP officials have come a little closer this week to nailing down the time frame in which users can expect to see an on-demand version of SAPs software.

"We will come out with a product when we are ready," Shai Agassi, president of SAPs product and technology group, said during a round table discussion with members of the press.

Agassi indicated that an announcement would be forthcoming some time next year.

Click here to read about SAPs SOA (service-oriented architecture) strategy.

SAPs CEO Henning Kagermann has in the past said the company would come out with a hosted version of its software, but that it would do so in a manner thats somehow different from the prevailing market leaders platforms.

Those vendors, including Siebel Systems Inc. (which is in the process of being acquired by SAP arch-rival Oracle Corp.), and NetSuite Inc., offer hosted versions of CRM (customer relationship management) and ERP (enterprise resource planning) suites, along with a variety of add-on products.

Salesforce, for example, has AppExchange, an on-demand marketplace where users can access and integrate applications developed by Salesforce and by a cadre of third-party developers who use Salesforce tools.

Analysts suggest that where SAP will differ with its on-demand model is in providing back-end integration to its ERP applications and underlying technologies.

"Its pretty well known that SAP is definitely angling to put on-demand in the market, starting with CRM, based on [the success] of" Joshua Greenbaum, principal of Enterprise Applications Consulting, said during a November interview regarding Microsoft Corp.s on-demand plans.

"I dont expect SAP to have an on-demand competitor to Salesforce that really dukes it out on feature and functionality. What they will do is say they have seamless integration into the SAP stack, and that will be the differentiator."

SAP ERP competitor Microsoft, having repeatedly hinted at an on-demand offering, announced earlier this week its Dynamics CRM 3.0 suite, with both hosted and on-premises options. Microsofts on-demand applications will differ from those of other vendors in that, starting Jan. 1, they will be accessible through partners.

Evolution of a Process Platform

During this weeks two-day summit in Vegas, SAP executives outlined the future of the company regarding product evolution.

That includes ushering in the next wave of computing, dubbed Enterprise 3.0 by Agassi, and building out the necessary services-based architecture, or ESA (Enterprise Services Architecture) in SAP parlance.

The key pieces of that architecture include NetWeaver, and later BPP. SAP announced Monday it would build vertical process platforms as well—the first is called Industry Value Network for Banks—with more to follow.

The upcoming version of NetWeaver will provide a more open process modeling environment to users, a critical component as companies work toward services-based architectures that enable composite applications based on business processes.

"All different things come together based on NetWeaver," Peter Zenke, who heads research and breakthrough technology development at SAP, said during his keynote address.

"We are offering modeling tools of business processes in the next edition of NetWeaver, in [IDS Scheers] Aris, which is the way we model at SAP. These models are open to the rest of the world as well. These are business models we can transform … can expose to non-SAP modeling tools, and can import as well."

Next Page: SAPs development practices.

SAPs Development Practices

Jim Snabe, senior vice president at SAP, talked about the evolution of his divisions industry initiatives that include the creation of new process models and solutions to link companies in different markets.

Snabe gave the example of bringing together the automotive industry and chemical industry during the new product development process, which would in turn trigger banking and logistics processes.

"This is a big opportunity for us, moving forward, to try and glue industries together through processes that sit between industries," Snabe said during his keynote address.

"Our first [initiative] is to describe new scenarios, and then [determine] which pieces of industry solutions can we reuse."

SAP has 28 industry product portfolios.

While Agassi touched on the broader concepts of BPP, Zenke went into the specific development practices his team is utilizing.

"The history of SAP is going to 28 industries. [With those in mind] the platform became heavier and heavier. That should not happen again," Zenke said. "Our design principles are: Dont overload the platform, fast execution, performance and reliability, not too complex. We are not forced to push everything into the platform—its not static, its dynamic."

Zenkes team also grappled with the definition of a process component, or what exactly a component should contain. To date its boiled down to the virtualization of business processes plus services, with the flexibility to build services.

"What is [a process component] and what is not [has been] a really critical part of SAP moving forward over the last 30 years," Zenke said. "[The development of BPP] is the first time in the history of software engineering that we start with a digital mock-up of the product to be created. Its the first time we applied that principle."

The first iteration of BPP will include about 30 of SAPs main components, according to Zenke. Roughly 17 to 20 will include integration scenarios with SAPs applications. In terms of defining services, Zenkes team started with process solution maps, defining the end-to-end business processes from the perspective of different industries.

"This is not easy," Zenke said. "End-to-end processes go down to a lot of variants."

Read more here about SAPs commitment to process integration.

The services make up a process repository, available with the first iteration of BPP that will define, not only services, but business processes as well.

"What is different that SAP is doing than all other repositories out there?" Zenke said. "Implicitly what we mean [by a service] is a service that is ready to execute. A services definition is fine, but what does it mean? Nothing. You have to rely [on it] that the service does exist, but to fulfill it goes deep into all applications. This is coding."

Zenke said SAPs services repository will link a services definition into a process engine, in two different settings: ABAP (Advanced Business Application Programming), SAPs proprietary programming language, and Java. SAP also plans to provide a model-driven user interface with the BPP platform.

"We believe UI is a form of flow between systems and user," Agassi said during the press interview. "We have a team that has described that flow in algebra and created flowcharting that calculates the math to a variety of different user experiences. The last time anyone put math on top of an IT concept, it was called SQL. Now were applying that to the user, and to a fundamental UI approach."

According to Agassi, the whole IT market has viewed the user interface as the first design principle in application development.

"We think its a process first—not UI," Agassi said.

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