SAP middleware gives customers

SAP AG’s failure to maintain strong investment in its middleware offerings is a signal to customers to look to other vendors like Microsoft Corp., IBM Corp. and Oracle Corp. when integrating heterogeneous applications, said a Forrester analyst.


“For the last several years, SAP has been falling behind in creating a comprehensive platform and in maintaining a strong level of investment,” said John Rymer, vice-president and principal analyst with Forrester Research Inc.


The Germany-based software company’s lack of ability to step up to enterprise challenges of application integration and custom development has meant it lags behind middleware rivals Microsoft, IBM and Oracle, said Rymer.


“This has caused a lot of heartburn among clients,” said Rymer, who has warned many customers that SAP’s middleware offerings just won’t be competitive over a 10-year period and that they best look elsewhere. “We don’t think SAP is going to step up to those requirements over the long haul,” he said.

SAP co-CEOs talk company direction, building trust 

But SAP did have the ambition at one point to compete on the middleware front against Oracle and IBM. There was a shift in focus due to the inability to continue to maintain investments, and after the departure of Shai Agassi, former president of the products and technology, said Rymer.


Although SAP’s core business is applications, the company can’t live without middleware. “They need an underlying platform and SAP needs to provide for the enterprise middleware requirements of its customers,” said Rymer.


The comments were made during a Web cast about what customers should know about SAP’s product strategy in areas like middleware and customer relationship management (CRM).


Rymer said it’s highly unlikely that SAP will beef up that investment in Netweaver. Instead, what is more likely and practical is that it will start to de-emphasize its own Java infrastructure and align with either a single or multiple Java middleware providers like Oracle, IBM and JBoss. “We don’t think it’s very likely SAP will jump into an exclusive relationship with Oracle for Java application servers,” said Rymer.


A combination of search, analytics and social computing is a “next set of battles” SAP should focus on, where IBM, Oracle and Microsoft don’t yet dominate, said Rymer.


Middleware aside, the focus turned to woes concerning CRM. Bill Band, vice-president and principal analyst at Forrester, said that while SAP CRM has a large install base, inquiries from businesses have been consistently about past discontent with the product. “The decision to adopt SAP CRM is typically not a foregone conclusion,” said Band.


Despite the consolidation in the CRM market in the past four years, Band said customers still have plenty of options like Oracle’s Siebel and Peoplesoft and Microsoft’s Dynamics.


Band said while SAP CRM has improved in recent years, the company has failed to compete effectively on the software-as-a-service (SaaS) CRM front against offerings like Until lately, SAP’s SaaS strategy has not been clearly defined so it remains to be seen if it will beef up efforts in this area, said Band. “Clearly larger companies are filling in around the edges with SaaS solutions (from other vendors) to meet a near term need,” said Band.


In terms of what customers can expect, there likely won’t be a big ERP (enterprise resource planning) release, said Paul Hamerman, vice-president and principal analyst with Forrester. Instead, an “incremental new release” seems more likely that bundles individual enhancements and focuses on in-memory and cloud computing, technologies in which SAP has expressed interest. Customers of SAP’s core ERP offerings need not worry, said Hamerman.


Follow Kathleen Lau on Twitter: @KathleenLau

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