A new competitive battleground has been opened: underlying technologies outside the usual core business competencies of application providers.
Indeed, though Oracle came from the technology camp (with databases, development tools, and application servers), there was never a close enough link between the technology group and the application group at Oracle. On the other hand, SAP has been increasingly aggressive in the technology area. At its recent Sapphire user conference, SAP provided further details around its NetWeaver offering, a collection of underlying technology components (e.g., portal, data warehousing, middleware; see below) for an application backbone.
In fact, to a large extent, the NetWeaver initiative positions SAP as a technical competitor to IBM, Oracle, Microsoft, and BEA. For the time being, SAP will aggressively sell NetWeaver into SAP customers as the "preferred" standard for application extensibility.
The following are some of the key components of NetWeaver:
Portal Framework: SAP Portal works well for SAP components. Rather than having to build document repositories and collaboration tools into each module, which would be too difficult and redundant, SAP Portal can be relied on to perform this integration. SAP's portlets (iViews) have a deep level of integration around its proprietary Drag & Relate functionality. Defining iViews for custom applications that exploit Drag & Relate can be complex. Nonetheless, more than any other technology in its arsenal, SAP Portal is the component that can best make NetWeaver work.
Business Information Warehouse (BW): Unlike most independent data warehouse providers (e.g., Oracle, Microsoft, Teradata), BW can self-describe dimensions, hierarchies, facts, aggregation rules, and metadata. Heavy SAP R/3 users find this prepackaged business content from BW enormously compelling. Moreover, SAP BW does a good job integrating both SAP and non-SAP data into BW. The overall development work for the BW architecture is essentially complete. The most significant issues cited by clients have been the performance and scalability of BW at the terabyte level.
Master Data Management (MDM): SAP, with its Master Data Management offering (first shipped in 2003), illustrates an approach to solving the breadth of the data synchronisation problem by bringing numerous technologies together: SAP middleware (XI), workflow, and specific MDM technologies for creating an MDM hub, as well as adapters to disparate data sources. MDM needs one or two more product releases to become a truly mature product, but currently can be used on smaller projects.
Exchange Infrastructure (XI): XI is intended to be a general-purpose, standards-based enterprise application integration (EAI) mechanism that operates both with SAP and with other systems. Version 3.0 contains all the necessary pieces to be competitive with commercial EAI products. The current XI product has a modern standards-based architecture (extending through the transport layer) that is in keeping with the direction we recommend clients pursue. The product is fundamentally repository-based. This means that there should be reasonable ways of federating multiple systems with a distributed administrative infrastructure. The current disadvantage is that Version 3.0 of XI is not yet available.
Web Application Server (Web AS): SAP Web AS is a Java-based application server or "container" that manages components and services (e.g., business and transaction logic) in a multi-tier application. In addition to core Java support, Web AS also provides native support for ABAP, SAP's proprietary development language. We do not expect SAP to effectively compete directly with the major players in this space (e.g., BEA, IBM, Oracle, Sun). However, SAP has done a good job of driving interest and uptake of SAP's strategy for extending enterprise SAP applications using Java.
Business Process Management (BPM): SAP NetWeaver currently has technology to support all the interaction patterns of business processes (human-to-human, human-to-system, and system-to-system). Although the integration across these capabilities has gotten tighter, the pieces are not completely unified and are sold both independently and together (in NetWeaver). These technologies work well within SAP but will require future technologies (e.g., announced partnership with IDS Scheer) to provide broader capability.
Composite Application Framework (CAF): SAP's CAF is Java-based and interoperates with .Net through Web services. This is a service-oriented framework that plays together with the integration facilities, application server, portal, and core business applications. We believe the major roadblock will be the maturity of the end users and their willingness/ability to build composite applications, reuse services, etc.
We believe that NetWeaver will increasingly be adopted for broad technical architecture usage. SAP is the first vendor to tie multiple components together by common metadata. Moreover, its architecture, especially CAF, provides a well-defined approach for integrating disparate business processes across the enterprise. The aforementioned notwithstanding, companies should compare NetWeaver to offerings from large technology providers (e.g., IBM). In addition, though we believe that increasing one's bet on SAP (i.e., both functionality and technology) is safe, some clients will feel more comfortable investing in multiple application and technology providers.
Bottom line: Numerous NetWeaver components (e.g., Portal, BW) are mature and can be used generally across SAP and third-party applications. Some components (e.g., XI, MDM) are less mature but usable on smaller projects. Companies, especially those that are highly SAP-centric (more than 90 percent), can consider NetWeaver for broad technical architecture deployment.