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SAP Grabs at Infrastructure Share

Last week at SAP Tech Ed, SAP announced that they would build an app server (think BEA) and an integration product (think Tibco, WebMethods). All the analysts and reporters at the press conference immediately headed for the really excellent refreshments table.

The eggheads didn't care or didn't believe. But the gearheads did. Every session on these new products was so packed that they didn't just run low on handouts, they ran low on oxygen.

Why? The new products would be a provide a more or less good way of dealing with three problems that most CIOs consider insoluble. They are:

  • SAP products are hardware hogs big time.
  • Integration costs are the kudzu of the IT budget--ugly, slowly taking over, and impossible to stop.
  • Every new application requires its own net and hardware infrastructure.

CIOs would have a single platform for running SAP, for creating and running middleware, and for doing application development. (The app server runs native Java and ABAP.)

That would cost less money. The CIO could consolidate the SAP hardware (now proliferating as fast as slums in Sao Paolo). The CIO could use a single integration platform that is arguably as good as or better than whatever he is trying to standardize on now. And he could run some custom code on the SAP app server.

To the small community that understands what these things are, the promised products are as much of a gimme as "single integrated business application" was to C-level executives back when SAP was peddling that.

"Promised" is the key word, of course. The first products won't be ready for at least a year, probably more, and the eventual provision of full functionality will be evolutional. That's right. Long time coming. No immediate revenue effect. Significant risk that it will never have an effect.

But less risk than SAP's last attempt to grab a new market, the APO product that Hasso promised to withdraw if it wasn't best in breed in three years. (Hint: it isn't.)

There are three reasons that there's less risk.

  • SAP really does understand all this gearhead stuff and has a passion for it.
  • Customers are really upset about how much it costs to run and they won't upgrade unless something is done about it.
  • The underlying designs are extensions of things that SAP already does. SAP already has an app server for ABAP; they are "just" rebuilding it so it runs Java, too.

The name of the game in the enterprise apps market is to sell more to your installed base. With this announcement, SAP is insuring that its customers will continue to commit to it as the core application, is creating something new it can sell to them, and is giving people yet another reason to replace old apps with new SAP modules.

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