SAP’s “co-innovation” trumps Oracle’s “consolidation” strategy, says Kagermann


SAP AG chief executive Henning Kagermann used his Tuesday morning keynote at his company’s annual Sapphire user conference in Atlanta to convey a “delivering on results, stay the course” message.

Compared with competitors such as Oracle, which has pursued an aggressive growth through acquisition strategy in recent years, German enterprise software developer SAP has preferred to grow and develop new technologies organically.

SAP’s strategy is one of co-innovation, Kagermann told the around 15,000 conference attendees.

He said SAP is working with customers and partners to develop on its NetWeaver platform, and outlined new social networking initiatives the company is launching to help foster communities of interest.

He contrasted this with the strategy being adopted by SAP’s biggest competitor – Oracle. “SAP is co-innovating the future, while our competitors are consolidating the past,” said Kagermann. “We’re not following the consolidation trend for good reasons; because it’s not a good strategy for our users.” Noting that SAP has delivered on its promise of a service-enabled suite by establishing enterprise SOA across the SAP product suite this year, Kagermann said the eSOA platform is needed to support business network transformation.

He said businesses increasingly feel the need to look outside their own organizations and more effectively collaborate with business partners and customers, and that takes enterprise SOA.

“Business network transformation has become the primary source of competitive differentiation,” said Kagermann. “It’s about business connectivity, it’s about speed, and it’s about people productivity.”

A Canadian analyst said while SAP is doing some exciting things around Web 2.0, with its social networking initiatives, he was struck by the stay the course theme of Kagermann’s address.

“There’s not a lot of fancy new things going on here,” said Joel Martin, vice-president of enterprise software with IDC Canada.

He said SAP’s “message to its key customers – the multi-billion dollar companies – is ‘we’re not throwing you any curveballs. We’re here to support your business processes and help you execute.'”

The strategy is not without its downside though, said Martin. With Oracle moving to consolidate the market through acquisition, he said Oracle becomes a more attractive upgrade option for companies that are already using many products Oracle has acquired.

“It makes it harder for SAP to go in there and compete if more and more of their platform is being consolidated with Oracle,” said Martin. SAP used Sapphire to lay out a new roadmap for its Duet offering with Microsoft, and launch a Duet appliance with HP and Microsoft that promises to shorten implementation times.

Duet, jointly developed by SAP and Microsoft, allows SAP users to use the Microsoft Office platform as an interface into their SAP systems.

Later this year, the companies will release Duet 1.5, followed by Duet 2.0 toward the end of 2008. In the future, users will be able to access SAP’s CRM data from Office as well as information held in mySAP applications.

Customization capabilities are also planned so users and partners can tailor existing scenarios to their own needs and come up with new ones.

“An increasing number of our customers are depending on Duet, and with this roadmap [they] can plan their future around these two great platforms, SAP and Office,” said L

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