SAP steps up integration strategy

21 Jan 2003

German software powerhouse SAP has entered the web services fray with a new technology platform, called NetWeaver, which it says will bring significant benefits to its 19,000 customers around the world, not least by helping them reduce the amount of money they spend trying to get disparate technologies to work together.

NetWeaver is a new product family which, says SAP, will enable its customers to use software tools from IBM and Microsoft to tailor SAP applications to their needs and also integrate SAP technology with third-party applications. NetWeaver will work with both IBM’s Java-based WebSphere and a variety of Microsoft .Net products.

SAP, IBM and Microsoft have also established joint technology support centres to help customers use NetWeaver and integrate it with WebSphere and .Net.

SAP has been the world’s leading business applications developer for a decade now. It is best known for its R/3 application, which runs the key business processes from human resources (HR) to accounting, manufacturing to sales of thousands of blue-chip organisations around the world. Irish customers include Glanbia, Guinness, Aer Rianta, AIB and Cadbury.

As a so-called tier-one provider, SAP is at the top of the food chain of business application developers. But while its technology may be highly rated, the company has earned a reputation for lengthy and expensive implementation projects. In some cases the cost of implementing the software has run to four or five times that of the software itself and a host of large system integrators have profited handsomely over the years from SAP projects.

It is this yawning gap between licensing and implementation costs that NetWeaver is seeking to close. Again and again in its launch announcement, SAP referred to its goal of reducing the cost of technology management within large organisations, the major barrier to which is integrating a variety of IT systems and platforms. Summing up SAP’s new philosophy, Shai Agassi, a member of the Executive Board of SAP, commented: “With SAP NetWeaver SAP has delivered the blueprint for turning web services from a concept into a business reality, while at the same time driving down the costs of operations.”

Ironically, SAP partner IBM has as much to lose from the NetWeaver initiative as it has to gain. On the one hand, the announcement is a boost for its Java-based WebSphere technology in its battle with Microsoft’s competing .Net standard. However, IBM is also the world’s largest IT services company and a key SAP implementation partner, a business that could be seriously eroded if significant numbers of SAP customers use NetWeaver to engage in DIY development and customisation of SAP applications.

Meanwhile, as SAP was unveiling its web services grand plan, the world wide web consortium (W3C) announced that it was establishing a working group to define rules for web services choreography. This term refers to mapping out how different web services interact to make business transactions. W3C argues that a standard for choreography is needed if the fragmentation of web services technology is to be avoided.

By Brian Skelly