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A New Era For SAP


According to SAP co-founder Hasso Plattner, the CEO appointment of Leo Apotheker is much more significant than may be first recognized. Plattner goes on say that the 37-year-old Enterprise Resource Planning software company needs more than just a new CEO, it needs a change agent to spawn innovation at a business software company that is becoming complacent. Apotheker recognizes the task at hand. "We started out automating back-office functions," he commented at the Sapphire conference. "SAP today is all about enabling clarity and transformation of business, which takes us into a whole different category of applications."

In the last week Apotheker has taken the CEO helm from what was a shared role with Hasso Plattner and Henning Kagermann. At last week’s SAP Sapphire conference, Plattner made it clear that he and Kagermann are the old guard and Apotheker brings a new era to SAP.

Apotheker indicates he driving SAP's culture to become more nimble, responsive, and customer oriented. In a possible sign of greater customer influence, SAP has agreed, at the urging of its user communities and customers, to reach key performance indicators before implementing annual maintenance contract price hikes which escalate from 17% to 22%.

SAP CEO Leo Apotheker
CEO Leo Apotheker

SAP is also introducing new software technology innovation. Following the acquisition of Business Objects in 2007, the combined companies are introducing a new Business Intelligence (BI) and enterprise search tool named Explorer (didn’t Microsoft already coin that term?) that empowers employees to search large volumes of information using natural-language search input and keywords. This new enterprise search engine is a combination of the Polestar design developed by Business Objects and in-memory database processing created by SAP's Business Warehouse Accelerator. SAP is currently working with Dell, Fujitsu, HP and IBM to tune Explorer for various hardware environments and expects to begin shipping the product this summer. Unfortunately, Explorer's release will only operate with SAP's NetWeaver Business Warehouse, limiting its use and value for enterprises that use more than SAP as their data repositories.

In his Sapphire keynote address, Apotheker sought to explain the company’s direction and missteps about the repeat delays and possible death of SAP’s software as a service ERP product called Business ByDesign.

The web-based ERP hosted solution was shipped prematurely, incurred numerous problems and was finally sent back to the drawing board after an unsuccessful introduction. CTO Vishal Sikka indicated SAP may need to replace as much as 70% of the SaaS product’s internal workings of to get the costs down to what SAP considers acceptable. Plattner said a market-ready SaaS ERP solution should become available within two years; meaning that the product may make it to market around four years after the company launched the on-demand ERP product with much fan fare in a New York media glitz.

Using the intellectual property for acquired cloud computing company Coghead, SAP indicates it will also deliver new hosted services with integration to its on-premise Business Suite flagship products. SAP wants to position itself in the emerging cloud computing market by managing the cloud services which support front and back office business transactions. The German software giant is also taking steps to support other software manufacturer cloud platforms. Sanjog Gad, SAP's senior VP of advanced technology, is planning to operate SAP’s applications on Microsoft's Windows Azure platform.

Post Posted by: Jeffrey on 04.24.2009
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Todd Lorenzon says:
June 1, 2009 at 11:22 AM

As an SAP user, I'm extremely hopeful that SAP will delay and even reconsider the rises in their maintenance contract price escalations. In reality, the value of these contracts is extremely minimal however not procuring them is laying playing russian roulette. It's clearly a catch 22 of extremely costly proportion.


Janice Kelly says:
May 28, 2009 at 10:55 AM

I'm hopeful that SAP will finally get its act together and provide a respectable accounting software product in the software as a service space. We currently use SAP on premise and it is a complete overkill which results in excessive IT administration and annual maintenance contracts. Providing a path to a saas solution could offer a dramatic cost savings to our company. | ERP Software Forum