Great Expectations for SAPs NetWeaver

SAP is betting on its NetWeaver platform to give it the business solutions provider edge.

SAP AG is gambling that its NetWeaver integration platform will do for the company this decade what its R/3 application suite did for it in the 1990s: make it the premier business solutions provider for the enterprise.

NetWeaver, introduced in January 2003, provides a Web services architecture on which to build and run IT systems that link business processes from SAP and non-SAP applications.

"Its a huge enabling device for the SAP installed base and a spearhead into our competitors installed base," said Bill McDermott, CEO of SAP America.

The recently released 2004 edition of NetWeaver is built on a service-oriented architecture. It is the first version that integrates the platforms 10 components, which include a portal, an exchange infrastructure (called XI), a Web application server, a composite application framework and business intelligence software.

NetWeaver 2004 brings a handful of new functionality, including a new business process engine in XI, the ability to integrate radio-frequency-identification data into SAP software, and full support for Web-services-based provisioning and consumption in the Web application server. The new version provides ad hoc workflow capabilities in the portal and the first widespread usage of Web Dynpro, a Web-transaction application that enables the creation of optimized forms.

But even as the Walldorf, Germany, company looks to help enterprises respond more easily to changing business conditions by providing a platform for changing business processes, SAP officials said they understand that they, along with their customers, are going through an evolution, not a revolution.

"This is a foundation for a shift that will take some time," said SAP executive board member Shai Agassi, who heads NetWeaver development efforts. "It takes market share from the three-tier client/server [architecture] that took us through 10 years and into the next wave, that we hope will also take [SAP] the next 10 years."

Customers are hearing SAPs message about NetWeaver and recognize that addressing integration from the standpoint of a platform is preferable to one-off integration projects. But many are not yet ready to capitalize on the technology.

"It is a little early for us to move fully [into a NetWeaver] implementation," said Lawrence Volz, program director of business applications and IT at Pratt & Whitney, a unit of United Technologies Corp., in Windsor, Conn. "We know well head that way but not until 2005 or 2006."

Pratt & Whitney is in the midst of installing a single instance of MySAP Business Suite across the companys organization—and in the process replacing about 300 legacy systems and integrating others into its MySAP environment, said Volz.

"We have Plumtree [Software Inc. software] for our portal, and we are interested in the XI piece," said Volz. "We have SeeBeyond [Technology Corp.] now [for application integration], and its a case that we could compare [the two integration systems] and have a runoff. But we have picked SAP, we know it is right and we would like to leverage that."

Volz said he welcomes the opportunity afforded by NetWeaver to move away from ABAP, SAPs proprietary programming language, to a more open development platform. A full implementation of NetWeaver would provide that, but only for some development aspects, SAPs Agassi said.

"If [customers] want to do process changes, they will most likely do changes in ABAP. If they want to build processes, they can do that around Java," Agassi said.

NetWeaver will serve as the foundation for MySAP Business Suite development in the future, which includes MySAP Enterprise, the successor to the client/server-based R/3 suite. Given this, all MySAP upgrades will include the NetWeaver platform.

For the thousands of SAP customers still on R/3, NetWeaver is available at an extra cost, which is a potential issue for some of them, according to industry analysts.

"That is one more big piece of software they have to install, support, maintain and run," said Laurie McCabe, an analyst with Boston-based Summit Strategies Inc. "Whenever you have to introduce another big piece of software like that, it probably puts [integration] back at square one because its as complicated as manual coding."

However, the appeal of NetWeaver trumps any licensing issues for John Cucciniello, president of Direct Link Worldwide Inc., which runs SAPs Business One software.

"NetWeaver is very new and very, very aggressively revolutionary in thinking," said Cucciniello in Elizabeth, N.J.

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