SAP opens arms to NetWeaver community
At the SAP TechEd conference here on Tuesday, the company unveiled the Enterprise Services Community Process, an organization that invites SAP, its customers and other independent software vendors to design add-on SAP products. SAP said the group is structured to mimic collaborative standards-setting groups such as the Java Community Process and open-source foundation Eclipse.
In addition, SAP announced that Dell, Hewlett-Packard, Network Appliance, Novell, Research In Motion and RSA Security are the latest vendors to sign on as its partners; the companies plan to create products optimized to work with SAP's applications. In June, SAP announced that a number of large tech providers, including Cisco Systems, Intel and Microsoft, were using SAP's application blueprint, called Enterprise Services Architecture (ESA), to create closer ties to SAP applications.
SAP's partner network is an important bulwark against Oracle's aggressive drive in the packaged applications market. The company is aiming to make its NetWeaver infrastructure software a "platform" to run a large number of third-party products.
"You don't need to go out and buy every company out there," Shai Agassi, president of SAP's product and technology group, said in reference to rival Oracle. "You need an ecosystem for co-innovation."
Oracle has bought PeopleSoft, Retek and is in the process of acquiring Siebel. Using the Fusion brand name, Oracle's strategy is to create common software components, such as a portal and business intelligence, for all its applications.
Oracle executives have said that they are more experienced in the field of infrastructure software, or middleware, than SAP is. At last week's Oracle OpenWorld conference, CEO Larry Ellison said that Oracle is "thrilled" that SAP has chosen to compete on middleware.
"SAP has chosen to emphasize NetWeaver…a product when you scrutinize you see hasn't attracted a lot of market share," Ellison said, adding that Oracle's Java middleware conforms to more recent standards.
Participants in SAP's Enterprise Services Community Process will help identify areas of market need, company executives said. SAP will also detail its own product plans for the coming two to three years and provide technical definitions and tools so that independent software vendors (ISVs) can build add-ons.
The company will use a certification process, called Powered by NetWeaver, to ensure products stick to the ESA specifications. George Paolini, a former Sun Microsystems executive who worked on the early formation of the Java Community Process, is the company's senior vice president of platform ecosystem development and is tasked with building up SAP's partner network.
In a keynote speech on Tuesday, Agassi said that customers should expect to acquire more SAP products from other ISVs.
"After the Enterprise Services Architecture, your applications world will be made from apps by us based on these services, apps from ISVs...and apps you build yourself," Agassi said.
He predicted by the end of next year, there will be 1,000 applications from ISVs that conform to ESA.
The launch of the Enterprise Services Community Process, although expected for some time, is a substantial shift for the company. Historically, the company has not actively wooed independent software vendors, said analysts.
Agassi said integrated software will ultimately lead to more companies participating in SAP's partner network. "Instead of spending money on technical integration, you'll spend money on business innovation...and that's good for us," he said.
The company knows that ISVs that participate in the Enterprise Services Community Process will compete with SAP at times.
"There's an acknowledgement that somebody is going to build some stuff that's going to be competitive with what we do. But that's OK--that's part of being a platform," said Peter Graf, SAP's executive vice president of solution marketing. "There's been a belief change internally."
Although it's still relatively early, widespread adoption of SAP's ESA and NetWeaver software could be a boost for its partners and customers, said Jim Shepherd, an analyst at AMR Research.
"Before, ISVs could get conventional integration, which for the vast majority of partners and customers meant that they weren't getting close to SAP," he said. "They couldn't claim the close integration as if products were developed by SAP themselves--that's the potential promise of this."