It Is Possible - SAP And Baan Strange Bedfellows

It Is Possible - SAP And Baan Strange Bedfellows
P.J. Jakovljevic - July 19, 2001

Event Summary

What may have seemed impossible not so long ago, happened on July 3 - two former ERP foes have entered into an OEM relationship. SAP Portals, Inc., a provider of enterprise information portals and business intelligence products and wholly owned subsidiary of SAP AG (NYSE:SAP), the leading provider of business software solutions and Baan, the recently resurrected global provider of enterprise business solutions, have announced a strategic alliance that will enable Baan customers to integrate disparate software applications into the iBaan Portal.

Under the terms of the alliance, technology from SAP Portals will be embedded within the iBaan Portal solution, and Baan will participate in the advisory board of SAP Portals. This development follows SAP Portals' recently announced strategy to develop an open partnership model that fosters a broad technology and content ecosystem. It also builds on Baan's recent launch of iBaan, which is a suite of Internet-enabled collaboration solutions that should address manufacturers' growing demands for tighter integration and full visibility across their entire supply chains.

"By forming this alliance with Baan, we are delivering on a vision to introduce open, widely distributed portal solutions that integrate seamlessly with enterprise applications, empowering customers to collaborate effectively," said Hasso Plattner, co-chairman of the executive board, CEO and co-founder of SAP AG. "SAP Portals will deliver an open, innovative enterprise portal and information platform that quickly improves the bottom line for our customers."

Laurens van der Tang, president of Baan, added, "Our component-based architecture allows us to serve our customers with open and integrated solutions. We've had a long-standing partnership with SAP Portals, formerly TopTier Software, and its enterprise portal solutions work extremely well with our iBaan suite of products. We believe that it is in the interest of our customers to deliver a portal solution that has broad acceptance in the market and integrates with many applications, and therefore, we embraced the opportunity to work with SAP in this area. Earlier this year, we launched our new iBaan suite of Internet-enabled collaboration solutions, further strengthening our drive to become the only organization to offer real-time Internet-enabled solutions for manufacturing environments. The iBaan Portal solution, powered by SAP Portals, is a key component of our solution that gives networked employees direct access to all the information, applications and business processes needed for day-to-day decision-making and execution."

Market Impact

It appears that everybody is a winner here. The partnership with former enemy Baan illustrates SAP's willingness to share technology with a fierce competitor in order to provide customers better access to mission-critical applications regardless of which vendor developed it - a big point in winning the coveted perception war. Also, SAP's acquisition of TopTier Software thereby gets the endorsement as a very prudent move (for more information, see SAP Acquires TopTier To Further Broaden Its Horizons).

Baan, on the other hand, can continue development of its new Web-enabled product, without contemplating yet another, possibly devastating technology change in midstream. Both vendors should also feel good to have chosen a similar route to Web-enable their products - a more gradual and digestible way for its customers. This is compared to offering a steep technology transition from a fat client/server to a pure Internet architecture, such as chosen by PeopleSoft. Also, both major vendors can cite each other as endorsers of the openness and interconnectivity strategy, which may be perceived by the market as signs of confidence.

Further, note the iBaan and architectures will be able to take full advantage of TopTier's attractive "Drag-and-Relate" graphical feature.

Baan's renewed focus on the mid-market discrete manufacturing segment, the fertile ground on which it thrived during the mid 90s, is undisputedly a wise move. There were fears that SAP Portals, the company created by SAP AG around the TopTier technology, would pull away from Baan, a long-time adversary of SAP. SAP management denied any intention to retract the relationship, but Baan and its customer base remained nervous. Baan had long pinned its hopes on TopTier technology before SAP bought it.

However, although Baan's decision to avoid the direct competition with SAP is prudent, it may not be quite possible given SAP's (and other Tier 1 vendors' for that matter) increased appetite for the smaller enterprises. Nonetheless, both vendors seem to have matured and reached the mindset of "let the best applications component win in each individual selection case".

User Recommendations

Existing Baan users are also the winners at the end of the day. Baan's viability does not seem to be an issue any more as its rejuvenated and congenial management team has done a praiseworthy job of bringing the company back to health while concurrently unveiling a new product release that can compete with the other products in the market.

The above partnership should remove any anxiety that SAP's acquisition of TopTier might have caused Baan and its customers. Thus, Baan should be evaluated in a number of enterprise software evaluations within the discrete and, to a degree, within the process mid-size manufacturing market. Still, any organization evaluating Baan should keep posted, and consider existing functionality only. Current and potential users are advised to follow the company's new product introductions and keep a close eye on its future strategy.

As for a hypothetical case of both Baan and SAP competing for the same business, TEC has always endorsed the "let the best applications component win in each individual selection case" mantra. SAP will be winner even if Baan sometimes beats them in a selection, since the part of Baan revenue will go to SAP portals, and Baan has over 15,000 customers.

comments powered by Disqus