SAP Pushes SOA, On Demand

But customers may not be ready for new tack just yet.

ATLANTA—In his keynote address here at Sapphire April 24, SAP CEO Henning Kagermann said that SAP has completed the Enterprise Services Architecture road map it embarked on nearly five years ago and laid out the companys path for the next five years—one of innovation on parallel tracks and relying heavily on next-generation concepts, such as service-oriented architecture and on-demand capabilities.

But where SAP may be leading the pack in establishing NetWeaver, its services-based platform and ERP (enterprise resource planning) application suite, its lacking in the fundamental resources needed to carry the SOA mission forward: a skilled work force to help convert users from older R/3-based systems to the newer SAP ERP 6.0 suite and a user community ready to fully embrace the concepts of SOA, industry observers said.

"[SOA] is not the magic bullet to solve all problems," said Harry Bruce, section IT manager at Procter & Gamble, in Cincinnati. "There is clearly some promise there, but one of the interesting things in talking to SAP is that Web services are for rapid changes. HR/payroll is not where I think I want to be doing a lot of rapid changes. … But if I talk to my colleagues, theyre very much interested in SOA. So there are going to be areas of the business where its critical to react to customer demand—sales, marketing, new product development."

/zimages/5/28571.gifSAP and Microsoft use the Sapphire stage to outline their plans for Duet 2.0 and 3.0. Click here to read more.

Kagermann said he expects 75 percent of SAPs 36,000 users to upgrade to ERP 2006 by mid-2008, a huge jump from the 2,547 live implementations this year—which is itself a bump up from the 225 customer implementations in 2006—and one that requires a large stable of trained consultants. "There is a real skills shortage," said AMR Research analyst Bruce Richardson. "Leo [Apotheker, deputy CEO of SAP] told me he thinks they need 50,000 consultants. … I think they need closer to 70,000."

At a press conference here, Apotheker said SAP is ramping up a program to hire another 30,000 consultants. SAPs current consulting and customer support teams consist of 11,000 consulting and education employees, plus 6,000 service and support workers, a SAP spokesperson said.

As SAP moves its customer base to next-generation systems, it also will be undergoing an aggressive, dual-track development initiative, also based on SOA concepts. While SAP plans to keep its core ERP 2006 suite stable for the next five years—biannual upgrades will come in optional enhancement packages—it will rapidly evolve its SOA product portfolio.

SAPs five-year road map is a conundrum that includes parallel development tracks within development tracks, which means SAP will continue developing its core NetWeaver platform but develop enhancements separately. On a separate but parallel track, the company, based in Walldorf, Germany, will develop a new composition framework to further enable the development of composite applications, which NetWeaver was slated to do since its introduction in 2003.

/zimages/5/28571.gifSAP outlines NetWeaver road map. Click here to read more.

At the same time, SAP will develop its two midmarket suites: All-in-One and A1S. Kagermann said innovation from All-in-One could influence development of the A1S suite and vice versa. "After 2008, we will bring those innovations to the market in a side-by-side model," he said.

Also in 2008, SAP will synchronize its enhancement packages, harmonize the user interfaces and synchronize the suites. In 2009, SAP will introduce new applications based in part on the proven concepts of its A1S suite.

"This is very similar to how SAP did the launch of R/3," said AMRs Richardson. "It was only going to be for smaller companies or small divisions, and, ultimately, it ended up overriding the whole organization."

While SAPs road map and upgrade goals are ambitious, customers may find themselves stuck in the middle.

Christina Dixon, IT project manager of API, an aviation parts manufacturer and supplier in Memphis, Tenn., recently finished implementing SAPs R/3 4.7. Dixon said API didnt go to the latest version of SAP because her company wasnt aware of its options.

"We relied on our consultants to fill the gap [of knowledge about SAP], and thats hit or miss sometimes. So we missed out on the [SOA] road map with SAP," said Dixon. "When we do get to go to 6.0, theyre modularized in the upgrades, so you dont have to do a complete system upgrade, and thats just wonderful."

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