SAP IS FORGING ahead with its mission to build a set of xApps with the help of key business partners in an attempt toredefine
the evolution of enterprise applications.
Accenture, Cap Gemini, Bearing Point, and IBM are releasing a slew of xApp-based technologies this year. But at the same
time IT executives and industry observers are questioning SAP's ability to define how its new cross-functional business processes
will operate in heterogeneous environments.
As competitors such as PeopleSoft, Oracle, and J.D. Edwards use similar standards-based Web services technologies to extend
their own application suites, critics think xApps technology is more vision than reality and requires too much customization.
SAP counters that xApps have strong momentum in the marketplace.
The first xApp developed organically by SAP -- resource and project management -- shipped in December and has garnered two
customers so far.
"xApps makes sense of what Web services are all about ... drawing data out of an existing landscape of systems and composing
them," said Tim Bussiek, SAP's director of xApps marketing strategy.
"You can install quickly, [and] it can be supported over time. If you want to build a good software application, you need
a close tie-in with the underlying technology foundation. The xApps are really for mature companies that already have systems
... they extend those."
The xApps architecture requires SAP to shift from its traditional position as a pure enterprise applications company to
one that embraces best-of-breed solutions.
"Enterprise software really has to evolve to the place where it's built on an existing applications infrastructure, an existing
technology infrastructure and not requiring the wholesale replacement of the entire applications environment. A decent number
of [enterprise companies] are both understanding what the value is and definitely interested in at least giving SAP the benefit
of the doubt that they can deliver this," said Josh Greenbaum, principle of Enterprise Applications Consulting in Daly City,
Calif.
Greg Cudahy, who heads the global supply chain practice at Cap Gemini Ernst & Young, is working with SAP to market xApps
to early adopters who can serve as "victory flags" for each of SAP's xApps.
Customers are asking for the business case to be defined, and questioning whether Version 1.0 of the xApps will really solve
their particular problem, Cudahy said.
"There are so many potential things that can go into xApps [that customers are asking] what the focus is going to be," Cudahy
said. "[Enterprises are saying] 'I want to understand that this architecture is real. I've got to know what your footprint
is.' It's a question of how much sophistication will be in first releases."
At first blush, SAP's xApps strategy can be construed as a defensive strategy to carve out a spot in the growing market
for custom applications that span heterogenous systems, said Jon Derome, an analyst at Yankee Group in Boston.
"Those aren't things SAP has historically done very well," Derome said. "Because you are working with middleware-ish products
on top of SAP's suite, that in theory should allow for a lower cost of ownership. I haven't seen a lot of demand for xApps
so far."
If successful, the new xApps strategy also allows SAP to tap the growing market for applications that reside on the edges
of the enterprise -- to reach a customer or pull data from a supplier. Although this market can offer growth rates at more
than 20 percent -- much higher than the 12 percent for core applications like general ledger and human resources -- it also
is the stronghold of best-of-breed companies, Derome added.
"That's a tough place to sell a packaged application because that is where everyone makes their competitive distinction
known," Derome said. "That's typically a unique set of capabilities. That doesn't work real well in SAP's world."
With xApps, SAP also is beginning to explain how it plays in the current market shift of many Fortune 500 companies that
associated themselves with an application server platform such as IBM's WebSphere or BEA's WebLogic, Derome added.
SAP's advantage in targeting these large enterprises is its strong background as an application company tied to its technology
stack for integration, SAP's Bussiek said.
"We have all these integration technologies, [and] we integrate those integration stacks," Bussiek said. "We also have the
experience of building applications. Many [Enterprise Application Integration] vendors have relatively simple templates. In
the end, it's like a project approach, which after two or three years you want to do something with that project but you can't.
At some point it's not just technology. It's not just connectivity. It's the semantics on the data you are pulling."
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