SAP banks on Web services

SAP unveiled its new enterprise strategy Thursday, a granular, service-based blueprint that puts Web services squarely in the spotlight.

“Business drives technology not the other way around,” explained SAP exec Shai Agassi.

The New York-based application platform provider announced the Enterprise Services Architecture (ESA), a services-based business solution that will link Web services and other technology standards, including Microsoft .NET and IBM’s WebSphere (J2EE).

“Today’s announcement is as significant as the 1992 introduction of SAP’s third-tier client-server architecture,” said Hasso Plattner, co-chairman, CEO, and co-founder, SAP AG.

“We will fulfill the promise of Web services, bringing adaptability and interoperability to enterprise IT infrastructures through the introduction of the Enterprise Services Architecture…enabling customers to fully leverage the promise of today’s technology to seamlessly integrate their business process across all of their disparate systems, linking suppliers, partners, and customers across the value chain,” Plattner said.

The new platform allows companies to restructure integrated IT environments built on services-based business solutions that extend across business systems, SAP said.

All future SAP solutions will be based on the ESA blueprint – SAP also announced the availability of SAP NetWeaver, a rename and extension of mySAP Technology and the future technology platform for enterprise applications.

NetWeaver functions as an ESA enabler, SAP said, which will allow SAP and its partners to create new applications targeting cross-functional

business processes through tools, frameworks, rules, and methodologies.

Roger Ford, senior manager of SAP partner Accenture’s North American energy practice, said NetWeaver will give enterprises the ability to create an umbrella of portal-based solutions leveraging existing technology.

“This is basically taking what you may have externally focused with IBM WebSphere, and taking what you have that is internally focused, which may be built with Microsoft SharePoint, and creating a collaborative commerce solution that focuses on all those,” Ford said. “To put those components under this SAP-centric umbrella, which is a bunch of J2EE components itself, and make it work is key. We’re enhancing and bridging really disparate systems, whether they are Internet-enabled or whether they are legacy systems that no one has access to other than accounting clerks.”

SAP’s move further validates the shift of enterprise IT spending dollars from core business operational processes to processes at the edge of the enterprise, such as those for linking with customers and suppliers, said Jon Derome, an analyst with the Yankee Group in Boston.

“At the edge of the enterprise customization costs are high, integration costs are high, and you’re typically dealing with custom processes,” he said. “To meet those needs and keep customization and integration costs down, you can take advantage of Java and XML technology.”

The support for both .Net and J2EE could lower the cost of ownership for SAP applications, he added.

“If there is a way you can consolidate your SAP resources with your Java team and your Internet-commerce resources that is a really impressive cost-of-ownership advantage,” Derome added. “If you can leverage expertise in those two camps, which today are very separate groups, SAP can play a role in delivering these edge-of-the-enterprise applications.”

Organizations, including those in Canada, are making the transition to a services-based business model – this announcement reflects this and also the viability of Web services, according to Peter Graf, vice-president of market strategy for SAP.

“At the moment…there are a lot of Web services that don’t scale for the enterprise – they’re not secure enough,” Graf said.

This announcement represents a milestone for SAP and should define how Web services are used in the future, Graf said, adding that product pricing is tied to the size and shape of a company’s IT infrastructure.

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– With files from IDG News Service