SAP plans new platform as competitive weapon

For the past 18 months, SAP has been knocking on the doors of PeopleSoft customers, extending maintenance and licensing incentives to lure them over. Now that Oracle has acquired PeopleSoft, SAP is pulling out a fresh weapon from its arsenal in the battle to win customers -- new technology.

By 2007, SAP plans to have all its applications running on a new platform, to be based on the company's NetWeaver integration platform. The new technology, which the company is simply calling Business Process Platform, will lead to an "industrialization of the software industry" similar to the industrialization of the auto industry, according to Chief Executive Officer Henning Kagermann.

IDG News Service spoke with Kagermann about the new technology and the changed competitive environment after the German CEO presented the company's fourth-quarter results in Frankfurt, Germany, on Wednesday.

IDGNS: You introduced NetWeaver two years ago. Have customers meanwhile grasped what this technology is all about?

Kagermann: NetWeaver is an integration platform. We have integrated many technical tools into it so that customers can integrate their legacy systems with SAP technology more easily. Our flagship product, mySAP ERP, is already running on NetWeaver, and we plan to have the entire mySAP Business Suite on the platform this year.

Behind NetWeaver is a fundamental shift in architecture, which we call enterprise service architecture, or services-oriented architecture as it is also called in the industry. The idea behind this architecture is to give people on the outside access to functions inside our technology. In this sense, NetWeaver is a kind of composition platform for them to compose services.

IDGNS: Although you're still in the process of rolling out NetWeaver, you're already talking about a successor -- Business Process Platform. Why the change?

Kagermann: We could stop with NetWeaver, but if customers really want to adapt more quickly to new business models and be more innovative with their use of business software in the future, then they also need to be able build new services faster and with greater flexibility. To achieve this, we will take what is generic enough in our technology, such as components, business objects and processes like billing, and put these into an application platform. So if a company wants to develop a new add-on application, it now has access to functionalities such as CRM (customer relationship management) and SCM (supply chain management) through open interfaces.

What all this means is that we want to create reusable processes at the application level and combine these with NetWeaver. This, in a nutshell, is the idea behind our new Business Process Platform. It's essentially an evolution of NetWeaver with the added capability to run ready-to-run processes.

IDGNS: You have said that SAP's new business application software is something that businesses will use increasingly to gain a competitive edge. Does this mean you're prepared to give customers the choice between developing their own applications like CRM and SCM to run on your platform or buying these ready-built from you?