February 4th, 2009
SAP touts modular approach; Launches Business Suite 7
Updated: SAP on Wednesday introduced Business Suite 7, which carries a modular design so companies can pick and choose features.
Typically, enterprise suites are an all-you-can-eat affair where you pay for everything from payroll to inventory to supply chain.
Why is SAP making this move, which was portrayed as a SaaS-yish move in the Wall Street Journal’s prebriefing? In a word: Economics.
As the press conference started (statement), SAP co-CEO Leo Apotheker set the stage with the economic backdrop. He noted that the global economy is in true crisis. “This crisis happened so fast and went everywhere because we’ve done such a great job. We (the IT industry) were successul connecting the world and enterprises,” said SAP co-CEO Leo Apotheker.
Now there’s an example of looking at the bright side if I ever heard one.
Simply put, customers are strapped and aren’t going to invest in big implementations. A more scaled approach with shorter time frames is the order of the day. I caught up with Apotheker before the event. He made the following points:
- SAP’s applications have always been modular, but now the company is putting an emphasis on those capabilities.
- Customers upgrade based on processes and not acronyms like ERP, SCM, CRM etc. Apotheker asked why the industry is using acronyms from the 1980s cooked up by Gartner. Software needs to get to the point where you get an inventory process/module instead of an acronym. This end-to-end process approach has been SAP’s pitch for a while now.
- He didn’t agree with the Business Suite 7 as SaaS approach argument that was touted last night.
In a statement SAP said:
“The new SAP Business Suite is designed to ease upgrades and help customers reduce IT costs.”
These upgrades will be delivered via “enhancement packages.” The general idea is for SAP to give potential customers a low-risk way to try out its enterprise applications. The big risk here is that the economy will prompt customers to migrate to SaaS or other alternatives. Once SAP reels in a few modular-loving customers it has a chance to sell them more. Without a modular approach SAP will have a tougher time selling its applications.
At an event in New York City–the press conference hasn’t started yet–SAP will feature Jennifer Allerton, CIO of Roche; Jeannette Horan, vice president of enterprise transformation at IBM; and Ed Toben, head of global information technology at Colgate-Palmolive.
SAP’s release talks about reducing total cost of ownership, but I’d love to see some metrics. Namely:
- What TCO claims can SAP make?
- How much faster are implementations with the modular approach?
- And what are those aforementioned CIOs actually picking? What applications did they choose to do now and what was put off and why?
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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