SAP won

ORLANDO—On Day 2 of SapphireNOW 2010, SAP AG executives re-iterated the company’s belief in not dominating the entire infrastructure stack and allowing customers choice in how they build out their IT environments. While the message is likely a jab at rival Oracle Corp., one analyst noted concerns with SAP’s approach. 

“We believe the current stack will be challenged and we are forming partnerships with the leading vendors of the future stack,” said co-CEO Jim Hagemann-Snabe during a keynote.

The Germany-based vendor wants to specialize in the applications part of the technology stack because that is what touches the business, while working with vendors who specialize in other parts, said Hagemann-Snabe. The company will not be buying a hardware vendor, hence partnerships with the likes of Hewlett-Packard Co. and Intel Corp.


Similarly, at a press conference, co-CEO Bill McDermott said SAP doesn’t feel that it must sell everything to customers. “We are actually the anti-thesis of other people that participate in our space,” said McDermott.

Nigel Wallis, research director for application solutions with Toronto-based IDC Canada Ltd., told ComputerWorld Canada that Hagemann-Snabe’s comments about not dominating the entire stack are a definite jab at Oracle, which is pushing its image as a whole-stack vendor. “(It’s) absolutely a reference and counter-argument to Oracle’s ‘Own the stack, one throat to choke, one cheque to sign’ approach,” said Wallis.Day 1 at SapphireNOW: SAP execs talk Sybase, NetWeaver, Business ByDesign

Wallis said that SAP’s approach, as a technology company, is to make the most out of its R&D by forming smart partnerships with other vendors. “SAP can maximise their customers’ exposure to the smartest researchers in technology and not be locked into one vendor’s vision,” said Wallis.

However, Wallis noted there are issues of incremental costs and partner friction in SAP’s collaborative approach. “Will Oracle be more efficient in bringing innovation and cost reduction to the market than will SAP (and) partners of choice?” noted Wallis.

Also, during the Day 2 keynote, Hagemann-Snabe said SAP believes in designing software independently, but with consistency so that all the components fit together, whether on-premise, on-demand or on-device.

The goal, said Hagemann-Snabe, is to allow customers the flexibility to change business processes on the fly.

To that, Wallis said SAP’s message is a re-wording of its “timeless software” philosophy that is maintaining core business applications that are stable yet flexible, but now with the addition of on-device, on-premise, and on-demand.

However, the messaging is more of a “brand promise” to IT leaders “that their investments will work now, will continue to work in the future and will be consumable in the ways which they will need to be able to consume it,” said Wallis.

But while Wallis thinks SAP’s product positioning makes a lot of sense, he cautions that the company may not be quite there yet.

Follow Kathleen Lau on twitter: @kathleenlau

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