SAP creates new subsidiary

SAP AG said today it’s folding its Web portal and online marketplace and procurement subsidiaries into one unit to make it easier for customers to cobble together a unified e-business infrastructure.

The Walldorf, Germany-based maker of enterprise resource planning and other business applications announced it’s consolidating its SAP Markets Inc. and SAP Portals Inc. companies into one entity. The new unit, which hasn’t yet been named, will offer users a single access point to software that handles supplier relationship management, business intelligence and marketplaces as well as other products that will enable collaborative processes throughout an enterprise and beyond to customers and partners.

The new Palo Alto, Calif.-based company will be headed by Shai Agassi, who formerly ran SAP Portals. Hasso Plattner, CEO of both SAP Markets and parent company SAP AG, will become chairman.

The consolidation should be complete by the end of the quarter, Agassi said, adding that the new company may need to hire new staff rather than lay off workers. The 5,000 companies that now own products from the two subsidiaries will likely find they are dealing with the same field personnel as before. Customers will be getting a “bigger, stronger, more stable organization going forward,” he said.

Some analysts said the move makes both managerial and technological sense. It will now be easier for SAP to deliver turnkey portal and marketplace solutions that work over heterogeneous systems and enterprises and extend data and business processes to non-SAP shops and software, said Joshua Greenbaum, an analyst at Enterprise Applications Consulting in Daly City, Calif.

The firm still needs to roll out the connectors that will permit users to integrate their systems with non-SAP applications.

The reorganization appears to contradict SAP’s claim that its portal unit would partner with other business-to-business software vendors, said Karen Peterson, an analyst at Stamford, Conn.-based consultancy Gartner Inc. Although the relationship between the two subsidiaries and marketplace vendor Commerce One Inc. to sell online marketplace technology will continue, companies such as Commerce One will view the new subsidiary as a direct competitor, she said.

SAP will also have to rationalize its assorted technologies to deliver a complete platform. That could mean rolling out a portal offering with combined collaborative and transactional capabilities, she said.

“The technologies that are scattered around in [SAP] Markets and [SAP] Portals could allow SAP to get out of the data and technology business and into the business of helping companies work more effectively,” said David Dobrin, an analyst at Cambridge, Mass.-based B2B Analysts.

SAP must do far more with these technologies, Dobrin said. For example, he recommended that SAP get a “coherent message” for its product sets and help customers use the applications more effectively; make portal products that can perform business operations rather than just display data; and end the relationship with Commerce One.

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