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SAP Claims Neutral Spot on Web Services Field

Enterprise software maker SAP (NYSE: SAP) is following the revenue trail toward the integration niche. Rather than extending its product family of large, comprehensive applications, the company is focusing on "snap-on" modules that automate particular business processes, according to vice president of market strategy Peter Graf.

Enterprises are looking to make the most of system investments they have already made, he said, and SAP is counting on its reputation as one of the top ERP (enterprise resource planning) software vendors to lend credibility to its new integration platform.

"When you play golf," Graf said, "you want to play on a course designed by Tiger Woods -- not by Peter Graf. SAP has extensive knowledge in the application and integration game, so we knew what was needed."

MySAP Becomes NetWeaver

Last week, SAP renamed its mySAP technology platform "NetWeaver," announcing a new type of application it calls "xApps." An xApp automates a specific business process from end to end, Graf said, crossing departmental and business unit boundaries and probably spanning several enterprise applications as well.

SAP recently released the first XApp, its resource and program management module. Others will be developed by both SAP and third-party partners. In the works are mergers and acquisitions, employee productivity and product definition.

"A lot of our customers understand that they need to prepare for new sets of processes," Graf explained, "and also to drive more value out of existing applications. Processes like post-merger integration, advanced product portfolio management and corporate efficiency activities go across the organization, touch each and every employee most of the time, and have a significant impact on the make-or-break of a company."

Natural Evolution

SAP's move toward the middleware space is a natural extension of the evolution of information technology in the broadest sense. "In the past 20 years," Graf said, "business has changed from a centralized view of the enterprise through mainframes to the business process redesign approach of the 1990s to, now, the support of a distributed, global workforce and the introduction of specialized applications like CRM and supply chain."

Companies are interested in optimizing business processes that received little attention previously, Graf added, and that means establishing some sort of integration and application core through which data and process steps can be exchanged. NetWeaver is targeted toward exactly that need.

Playing It Safe

The first advantage of NetWeaver, said Graf, is that it delivers an integrated set of technologies. If a customer wants to deploy an enterprise portal and a business intelligence application at the same time, for example -- even if they are not SAP applications -- SAP has done the work of integrating them. "You don't have to make those two work together first," he said.

If customers do choose SAP modules -- an enterprise portal, for instance -- they come preconfigured with integrated business content. Using role-based views, SAP has designed screens that include links to both SAP and non-SAP enterprise systems.

SAP has committed to working with both Microsoft (Nasdaq: MSFT) and IBM (NYSE: IBM) to incorporate both .NET and J2EE technologies and standards, Graf explained. "Our platform is a kind of neutral ground," he said. "We are providing customers with a way to be on the safe side, no matter who wins the confrontation over the implementation of Web services."