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Tuesday, June 29, 2004

SAP's billion dollar bet

It's a future that looks markedly different from SAP's heritage as the company that defined the market for enterprise-resource-planning software. Though SAP is the world's third-largest software vendor, with more than 22,000 customers in 120 countries and $8.9 billion in revenue last year, the company is thinking bigger. It's remaking itself into a platform vendor that will sell everything from application servers to middleware to Web services. It will offer slivers of applications--called composite or "snap-on" apps built using services from other SAP apps--up to full-blown business-process sets such as cash management.As it considered making NetWeaver a bigger part of its strategy, SAP leaders weren't at all sure the degree to which the company could move its applications to NetWeaver and what the vendor calls its Enterprise Services Architecture, which exploits all of NetWeaver's Web services to enable an integrated system where business processes can be assembled on the fly. "The bar is very high for SAP.Its software has to scale to extraordinary degrees. Web services in a very complex, robust application environment were an unknown entity. Nobody had ever approached that." The gutsy undertaking has played a big role in the massive NetWeaver project, the 32-year-old company's largest development effort ever. It's bigger than the project that put SAP on the software map--the retooling of its mainframe-based R/2 software to its client-server R/3 apps. NetWeaver and the Enterprise Services Architecture have so far taken the equivalent of 250,000 days of work spread across engineers in Bulgaria, France, Germany, India, Israel, Japan, and the United States, at a cost of more than $1 billion. And it's not yet complete, with a target date of 2007 for SAP to retool its entire software suite to run on NetWeaver and the Enterprise Services Architecture. SAP engineers still are researching better ways to build applications from the ground up on its Web-services architecture. SAP's mission -"To become the platform for businesses' growth."

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