Update: SAP launches Business Suite 7

Apps vendor claims new iteration brings more than 150 improvements

SAP launched Business Suite 7 on Wednesday, pitching the software as a more flexible and cost-effective option amid lean economic times.

The new suite includes more than 150 new "functional innovations" that span the gamut from areas like CRM and SCM to industry-specific applications. It also continues SAP's emerging "enhancement package" strategy, which allows users to add functionality they want without the pain of a full upgrade.

[ SAP applications rival Oracle took aim at Salesforce.com with an on-demand CRM update last week. ]

Business Suite 7 is a major watershed for SAP, as it aligns the vendor's various modules for the first time on a single underlying platform, according Forrester Research analyst Ray Wang.

SAP "had to" do this, Wang said.

"People have had this perception that it's this one integrated system, but the reality is the [system integrators] have been tying all these [modules] together, making them work," he said.

SAP's move is also meant to lure customers on older SAP systems to adopt its SOA-based NetWeaver platform, which underpins newer ERP releases and Business Suite 7, Wang added.

Company executives repeatedly framed Business Suite 7 as extremely important for SAP, as well as customers, during a launch event in New York on Wednesday.

It "marks an absolute, true milestone in the history of SAP," said co-CEO Leo Apotheker. "It's a keystone we will build on for the future."

And due to features like the enhancement packs, customers' sleepless nights over their ERP upgrades are "over," he declared. "We're done with that."

An SAP spokesman delivered a product demonstration of the new Business Suite software, showing how a dashboard-like interface pulls in relevant information from various modules.

For example, a product manager for a GPS device could examine revenue data, view 3-D renderings of the product, track comments being made about the item on Twitter, or even change one of its parts.

With the high-profile product launch, SAP is also no doubt hoping to change the conversation from its controversial decision last year to transition customers to a richer-featured but more expensive Enterprise Support service.

SAP has insisted the service will result in lower cost of ownership for customers, but its move nonetheless sparked outcry from user groups. SAP has since agreed to cooperatively work with user groups on a set of KPIs (key performance indicators) to prove the service's value.

Executives repeatedly stated on Wednesday that through more flexible deployment options, Enterprise Support and other factors, Business Suite customers will end up saving money in the long run.

But Wednesday's launch in one sense highlights "how SAP customers are in really different places," said Jon Reed, an independent analyst who tracks SAP skills issues and runs the Web site jonERP.com.

The Business Suite 7 release has value for customers using the latest SAP platform, but many users are still on older systems and are looking for immediate ways to save money, not to necessarily spend it on large new software packages, he said.

For one customer in the former camp, the enhancement package approach to upgrades has proven to be easy, at least as far as turning on the software functionality. Other implementation issues, such as data loading and training users, still remain, said Jennifer Allerton, CIO of health care company Roche's pharmaceutical division.

Allerton is happy about Business Suite 7's synchronized release schedule. In the past, the modules' release dates "were really all over the place," she said. "This way now it's in lockstep. It's easier to plan for it."

But is not clear how the new functionality detailed in the demonstration Wednesday would actually work in practice at Roche, she said.

For example, it's highly unlikely that a product manager would unilaterally change a product part without consulting engineers and other workers, she said: "It's [important] to differentiate from what you can do, and what you would want to do."

SAP is planning to release enhancement packs on a yearly basis, according to SAP executive board member Jim Hagemann Snabe. The next one, due out at the end of this year, will include all previous packs, he said.

The company will also be announcing on-demand services for Business Suite 7 over the course of this year, Apotheker said.

This story was updated on Feb. 4, 2009.

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