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Finally, after months of hype, rumor and company innuendo, SAP has set the date to unveil its new midmarket on demand suite, code name A1S: Sept. 19.
SAP executives—including CEO Henning Kagermann and Deputy CEO Leo Apotheker—have talked at length about A1S since it was announced in January, while providing little concrete detail.
“A1S is the best and potentially the worst thing that happened to SAP. Expectations are high and kind of out of control,” said Joshua Greenbaum, principal of Enterprise Applications Consulting. “The real answers will come in September when they tell us more.”
The event in New York is expected to shed some details on the actual product functionality and underlying technology, as well as highlight some early customer reviews.
At the end of its fiscal year 2006, after a couple of missed quarters—its second and fourth—SAP announced in January 2007 that it would invest between $370 million to $493 million over the following eight quarters to build a new midmarket suite.
While the software, rumored to be on demand from the start, would likely have a negative impact on the companys operating margin for fiscal year 2007, SAP officials said in January that it expected the software to increase its earnings by $1 billion over the next four years – and triple its customer base.
Click here to read more about SAPs high expectations for its midmarket strategy.
Since its first whisperings in January, SAP has eked out a few more details. During its second quarter 2007 earnings call in 2007 a giddy Kagermann and Apotheker described certain features of A1S.
“[A1S] is planned first to be hosted exclusively. Then once it works, to offer it as an appliance on site—it gives customers more security as they feel that its not only their data that is separated, but also the [drive],” said Kagermann. “They could cut the line [to hosted services] and run.”
“A1S is designed to go after an untapped market for us, the midmarket, with a quick adoption, ready for quick consumption model where people are looking to get a suite of enterprise capabilities that they can get very fast,” Apotheker said. “Therefore it is designed broadly but not as deeply as our enterprise suite.”
Apotheker said SAPs large customers—some of the worlds biggest companies—arent interested in doing something that is “taboo” in a large company: implementing a new system “without even questioning for one second the performance and integrity of the core business they run.”
Rather, he said, SAP is providing an evolution of SOA [Service Oriented Architecture] development.
“Once A1S is out, there will be interconnections [with SAPs enterprise software],” said Apotheker. “There will B2B [business to business] traffic and there will be some innovation that will go both ways and you cannot exclude that once we are in the next phase of evolution, some differences will happen. But for the foreseeable future, the next two or three years, our enterprise customers want to see an evolutionary approach minimizing downside risk.”
There one thing is for certain: SAP is slated to go head-to-head with the reigning on demand software provider, Salesforce.com. While Salesforce.com currently provides only CRM [customer relationship management] software, it also has a multi-tenant development platform and language, Apex, that will enable partners to build add on applications to handle functions like financials and human resources.
Whether or not its a coincidence, SAPs A1S launch in New York overlaps Salesforce.coms annual Dreamforce conference in San Francisco.
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