It is amazing to see so many similarities (albeit with the inevitable handful of nuanced differences) between SAP, IBM, Microsoft, and Oracle's approaches to worldwide domination of the enterprise applications market. One similarity is these vendors' attempts to deliver a service oriented architecture (SOA)-based platform for their existing and prospective customers, and to entice their partners to build ever-growing ecosystems upon these (see SOA as a Foundation for Applications and Infrastructure).
To remind those who may have forgotten, SOA is meant to replace the outgoing client/server (C/S) architecture in which programs reside on personal computer (PC) desktops (called "clients"), but data are accessed from remote computers (called "servers"). SOA-based software, on the other hand, works via the Internet, and is a part of the business world's shift to standards-based software nuggets called "Web services" as one means to distribute, use, and store software. This approach promises more flexibility and easier integration of diverse software, whereby data and programs can reside and be accessed from virtually anywhere.
Web application servers remain the main engines behind SOA platforms, carrying out many integration, transaction management, and development tasks, which altogether are referred to as "plumbing". All of the abovementioned giants have their own application servers, and so do vendors such as BEA Systems, as well as some open-source providers like JBoss and TomCat. However, customers are increasingly using other SOA platform components to deploy, automate, and orchestrate Web services within a business process flow, as is the case with Oracle, JDeveloper, and BPEL Process Manager systems (see Oracle Further Orchestrates Its SOA Forays). Likewise, the SAP NetWeaver platform also contains many functions beyond plumbing, including business intelligence (BI), a portal, a mobile infrastructure, and an integration broker to link disparate systems.
While all of the above vendors' middleware stacks based on SOA principles share similar functions, there are inevitable differences. Oracle and IBM, for instance, are contenders to have the leading middleware and infrastructure platforms, which are so open that parts can often be swapped as "plug-and-play" components with equivalent standards-based middleware from other vendors. SAP, on the other hand, points out that its focus is to enable adaptable business processes, rather than to engage in a mere middleware peddling race. Nevertheless, SAP NetWeaver components also support all key standards and interoperate with other platforms (although the application server has to have a special engine to handle the proprietary ABAP code that still underlines much of SAP's installed applications base, despite the fact that newer applications are being written or rewritten in the Java 2 Enterprise Edition [J2EE] context).
This is Part One of a two-part note. Part Two will discuss NetWeaver's background and direction, and make user recommendations.
Given that SOA is a necessary foundation, but is a far cry from being sufficient for this long-term transition endeavor of disruptive innovation, SAP emphasizes what it calls enterprise services architecture (ESA), which is further permeated with specific business semantics, such as what defines an order (manufacturing, sales, purchase, service, etc.). In other words, whilst SOA is the technical blueprint for end-to-end system connectivity, SAP's ESA strives to achieve the common semantic language required to enjoy the full benefits of a scalable, reliable, service-enabled environment. This vision can be summed up with one core equation: SOA + ES (for enterprise services, SAP's version of business process-oriented Web services) = ESA. SAP deserves commendation for elevating a mere technical connectivity discussion (SOA) to a business process discussion (ESA), and for leveraging the enterprise services' granularity to support easier creation, deployment, and maintenance of end-to-end business processes.
SAP, furthermore, claims that it is farther down the road in terms of pre-built composite applications, which it refers to as xApps and which are the (ideally thin) top-layer of its above-mentioned platform, that enable customers and partners to create new business processes or extend existing processes.
During its recent analyst summit, SAP laid out the following series of assumptions as the foundation of its strategy.
- That SOA is not another information technology (IT) fad, but rather is here to stay
- That users demand to stay within their usability "comfort zone" and their familiar working environments (including the user screen metaphors, see Easy ERP: A Challenge to Conventional Thinking)
- That it is the entire ecosystem that will decide the ultimate "appli-structure" winner
- That the IT department will either become strategic to the user enterprise, or otherwise will be inevitably outsourced
- That all of the above beliefs will lead to the next disruptive technology inflection point
The above set of postulations has fueled SAP's drive to create and deliver a unified (in terms of events, data, documents, unstructured content, etc.) composition platform that features a repository of coherent services from which it is possible to enable innovation via xApps development. Composite applications, therefore, ideally must be instantly usable in the end-users' native work environment, and, consequently, must also unite analytics, transactions, and collaboration into a single process flow. Further, they must be easily added onto the existing applications, and they must be model-based (and ideally visual model-based) for process flexibility.
Accordingly, over a year or so ago, SAP introduced the concept of a business process platform (BPP), though they initially left many to wonder about what exactly it entailed. With its recent fleshing out of the idea behind BPP, SAP has given us to understand that the platform consists of the new, rewritten, and simplified SAP applications integrated into SAP NetWeaver, in addition to over 300 (and growing) new ESs. In other words, BPP is the next evolution of SAP NetWeaver, in which SAP and its partners have embedded industry-specific ESs and processes.
Right now, more than 500 customers are reportedly using the 12 commercially available xApps (some of which have been co-developed with partners), quietly generating over $125 million (USD) in revenues (never mind that this is still a drop in the bucket of SAP's over $9 billion [USD] revenues). The SAP xApps product line has also been expanding lately to include the analytic applications that SAP introduced at its SAPPHIRE user conference in mid-2005; since then SAP has productized around 100 of the more than 200 applications announced at that time. In addition, new xApps include fifty new productivity applications, including those in Mendocino (a joint SAP and Microsoft product that enables SAP applications to have Microsoft Office-like user interfaces [UI]).
To refresh our memory, at the SAPPHIRE 2005 conference, SAP unveiled plans to provide over 500 ESs and over 200 analytical applications (see Business Intelligence Corporate Performance Management Market Landscape). Slated for the near future, though, are new mobile and voice over the Internet protocol (VOIP)-based xApps; SAP hopes to showcase about thirty "lightweight mobile xApps" at SAPPHIRE 2006. The vendor claims to have 1,200 customers using, primarily for customer-facing applications, one or more of the eight existing, generally available, mobile xApps. If all goes well, there should be 1,000 xApps by the end of 2006.
SAP uses an intriguing model of business initiatives (i.e., ensure compliance, consolidate the core, optimize the operational network, manage relationships, enable new growth, and manage performance) represented by six rectangles (they are stacked in the bottom left corner, with each successive one being bigger than and containing the previous one) to describe the balance between productivity (which is highest at the ensuring compliance process level at the bottom of the stack) and the innovation or differentiation focus (which is highest at the managing performance process level at the top of the stack). This stacked model serves as a milieu for announcing SAP's intention of creating a BPP for each of twenty-eight major target industries.
The plan is for SAP to bring together independent software vendors (ISV), system integrators (SI), IT titans, and customers in order to define what to do, and the goal is to create industry-specific services, leaving only a thin orchestration layer to be done by SAP, partners, or customers in the creation of differentiated business processes, solutions, and applications. In fact, SAP's vertical strategies are to be conducted in the context of co-innovation on SOA, to which end the vendor has been engaged with successful ISVs within its target industries via industry value networks (IVN) that are designed to solve each industry's unique business problems by developing reusable services. This program is expected to deliver flexibility, fast returns, and lower costs owing to the incremental, non-disruptive adoption of these industry-specific processes. This is in sharp contrast to the traditional "brochureware", "demoware", or generic solutions' facelift practices of enterprise applications providers when they announce major industry-related initiatives.
SAP NetWeaver thus remains at the core of BPP, and will be the unifying platform for the industry ecosystem. One of the primary differences between NetWeaver as an integration platform and the more encompassing BPP is the emphasis of the latter on the SAP enterprise services repository (ESR). The ESR will contain not only the definitions of services, but also the definitions of business processes that utilize those services, and which are in turn implemented as business objects. SAP ESR thus serves as the common semantic foundation for the industry's new open business integration paradigm, and as the middle component of SAP's ESA backbone. It aims at reducing complexity, increasing cooperation, and delivering service-based integration, flexibility, and adaptation across the IVN.
Equivalent to data repositories in C/S systems, but still much more than a repository of services, SAP ESR will eventually define the end-to-end business processes of twenty-eight industries based upon the company's comprehensive understanding of each segment's respective processes. It is possible to leverage the functionality of IDS Scheer's ARIS modeling tool (or that of any other uniform modeling language [UML] or business process execution language [BPEL]-based toolset) within both the SAP ABAP Workbench and Java Development Studio (though to execute a service, one still has to change the code of existing applications). The result of this is that this structure will enable next-generation applications in an open manner, linking services definitions with process execution. Another paradigm shift toward more open processes is the move from traditional database, data-centric integration to message-based integration.
According to the SAP co-innovation plan, customers, partners, and SAP will collaborate to create various re-useable elements to flavor and contextualize BPP for each industry, to which end SAP has lined up a long list of partners that will participate. The idea is for this all to unfold in 2006, as SAP first has to complete a core set of business components with associated services. Towards that lofty goal, SAP has created a new applications architecture that currently consists of some 250 business objects, 17 process components, 25 integrated scenarios, and 300 compounded services, with approximately 30 components representing the core. This represents the evolution since 2004, when fifty-seven services in the realm of business-to-business (B2B) commerce were based on Web services description language (WSDL). The vendor has also been feverishly working on further exposing the objects and creating new ESs, so that the business objects and components can be accessed and reused, which it is hoped will reduce the typical enterprise application implementation time by up to 50 percent.
While technical advancements and improvements, coupled with customer adoption of SAP NetWeaver and SAP ESA, IBM WebSphere, Microsoft Dynamics and Project Green, or Oracle Fusion Architecture (OFA) are important, the most critical factor for the success of these platforms might still be these giants' ability to develop an "ecosystem" of consultants, SIs, internal development teams, and ISVs for their respective platforms. To that end, all the vendors have been throwing around impressive adoption numbers. For instance, Oracle claims that, as of late 2005, 7,500 ISVs were using pieces of its Fusion middleware suite, and 26,000 customers were using portions of it.
On the other hand, and as indicated earlier on, SAP has been working aggressively to build such an ecosystem and has relatively recently claimed milestones, such as the following.
- Over fifty ISV solutions that are "SAP Powered by NetWeaver"—which means the partner's solution can run on SAP NetWeaver's Web Application Server (WAS). Moreover, when one counts the partners that have SAP NetWeaver's Exchange Infrastructure (SAP XI) combined with SAP Enterprise Portal iView as part of the "SAP Certified for NetWeaver" criteria (whereby SAP WAS is not required), this number goes up to 400. There are also about 1,000 vendors that are working toward this certification, which designates that applications run on NetWeaver and do not just interface to it. In other words, "Certified for NetWeaver" means that all of the partner's solution's modules have standard adapters that facilitate passing data to the SAP XI component, which then converts data into a format that can be displayed by other NetWeaver components, including SAP Enterprise Portal. Thus, to date, about 1,300 vendors or so are close to achieving "Powered by SAP NetWeaver" or "Certified by SAP NetWeaver" status. This is up from the total of 450 vendors cited a year or so ago.
- About one third of applications-related SAP staff have been in touch with NetWeaver, while one half of research and development (R&D) staff members have been dedicated to parsing the code into NetWeaver.
- SAP claims to have 1,500 NetWeaver reference customers that use two or more pieces of NetWeaver. Meanwhile, more than five NetWeaver projects are going live on a daily basis, and SAP expects that by later in 2006, 30 percent of its over 20,000 customers will be using NetWeaver solutions. To that end, over 2,300 partner consultants have been trained to deliver the NetWeaver platform, which is not a bad start for a solution that has only fairly recently reached a level of maturity suitable for broader commercial adoption. SAP estimates that there are now over 6,000 strategic deployments built around NetWeaver, while a year or two ago most customers had little or no inkling as to what NetWeaver was or why they needed it. The NetWeaver infrastructure products are now considered a core part of every new project.
- SAP has also made significant progress in recruiting software and technology vendors to the NetWeaver community. To prove that it is serious about being more open, during the SAP Industry Summit, the vendor allotted a main speaking slot to Ariba, which was once one of its most love-to-hate foes and which is still a competitor in the e-procurement space. Now, However, with the advent of Ariba Sourcing Network (ASN), Ariba is an xApps partner in the enterprise spend management and strategic sourcing space. Vendavo, in another good example of this new openness, discussed how it has teamed with Accenture and SAP to deliver an optimization solution to the chemical industry that provides customer value of 1 percent to 3 percent incremental return on sales, thereby addressing a major challenge in this sector. Last but not least, SAP has more than doubled membership in the SAP Developer Network (SDN), with a membership that has grown from 115,000 to 260,000 since the end of 2004 and that could reach the one million mark before the end of the decade.
One should note that SAP's above figures are likely more closely counted than Oracle's, and thus some may seem less impressive at first sight. Oracle's numbers, however, are likely all-inclusive in terms of middleware customers rather than pegged to middleware bundled with the applications strategy (although the vendor touts that there are currently more SAP shops that use the Fusion platform pieces than the NetWeaver ones). In any case, SAP's ESA, NetWeaver, and BPP developments remain the key theme at all the recent SAP's events and user conferences.
This concludes Part One of a two-part note. Part Two will discuss NetWeaver's background and direction, and make user recommendations.