As expected, Intel Corp. and SAP AG have formed a joint venture, Pandesic LLC, which will sell hardware and software for electronic commerce.
Serving as chairman of the new Sunnyvale, Calif., company will be Harold Hughes, who ran logistics and operations for Intel. Bryan Plug from SAP will become Pandesic's new CEO and president.
The new company will use Intel-based servers running Microsoft Corp.'s Microsoft NT and SQL server, and use SAP's software for the commerce applications. A demonstration of Pandesic's software products today, ran through inventory management to transaction processing to order fulfillment.
Intel and SAP have been working together for several years on Intel's own fulfillment processes, Intel President Craig Barrett said during a press conference today.
"We've recognized a common goal toward bringing this operability to the end user. It's nice to see that this won't just end with a nice glossy home page on your computer screen," he said.
The formation of the new company, as reported on July 21 by PC Week ( see story), marks SAP's first major foray away from its flagship R/3 client/server suite. Analysts speculated that the new company would benefit the German giant and diversify its revenues. SAP has recently announced new features in its R/3 suite that include electronic data interchange and intranet applications.
In contrast to SAP's extraordinarily complex software, the demonstration by Hughes and Plug today was aimed at showing the ease of use of Pandesic's products. Setting up the system at a company would take about six weeks, Hughes said.
"This is an installation, not an implementation," he said. Pricing will also differ dramatically from SAP's multi-million dollar deals, with initial set-ups for small companies starting at the "double-digit thousands" plus percentage-based transaction fees, officials said.
Intel's motives in funding the deal are very clear.
"One of our main goals in life is to create new uses and users for hardware. This is an excellent opportunity to extend our brand forward. It is an emerging market and should be very large by end of decade," Barrett said.
Intel is based in Santa Clara, Calif., and SAP's U.S. headquarters are in Wayne, Pa.