To anyone even remotely following SAP AG (NYSE: SAP), the leading provider of enterprise applications and the market's bellwether, it should be crystal clear that, for the last couple of years, SAP's aggressively promoted application and integration platform, SAP NetWeaver, has become the main pillar of the vendor's strategy to remake itself into a platform vendor too. In addition to its broadest suite of enterprise applications in the market, mySAP Business Suite, SAP will sell possibly everything from application servers via middleware to Web services (envisioned, in SAP's case, to orchestrate business processes by means of packaged composite applications across or atop existing systems).
Unveiled early in 2003, it was promoted as an open-standards-based infrastructure blueprint that should eventually enable technical interoperability and drive collaborative business in an admittedly heterogeneous IT (information technology) world. This should eventually allow companies to drive additional business value from existing increasingly legacy-status technology investments (for more info, see SAP Weaves Microsoft .NET and IBM WebSphere into Its ESA Tapestry), SAP NetWeaver has meanwhile become a multipurpose engine inside most of the mySAP Business Suite, which on a coarse granular level includes the mySAP Enterprise Resource Planning (mySAP ERP), mySAP Supply Chain Management (mySAP SCM), mySAP Customer Relationship Management (mySAP CRM), mySAP Supplier Relationship Management (mySAP SRM) and mySAP Product Lifecycle Management (mySAP PLM) suites. To that end, the platform provides a Web services-based architecture on which one is to build and run IT components that link business processes from both SAP and third-party applications.
With SAP NetWeaver 2003, SAP introduced two capabilities that extended the technology stack beyond the initial capabilities of the former mySAP Technology stack, which, inter alia, consisted of SAP Web Application Server (SAP Web AS), SAP Enterprise Portal (SAP EP) and SAP Exchange Infrastructure (SAP XI). First, the new composite application framework was built into SAP NetWeaver to enable SAP and its partners to create the above-mentioned composite applications (also called cross-applications or xApps) targeting cross-functional business processes through tools, frameworks, rules, and methodologies. These would include, for instance, an object access layer that allows customers to abstract from the underlying heterogeneity and to create a unified development and deployment environment. Second, SAP NetWeaver also included SAP Master Data Management (SAP MDM) services, which was SAP's first standardized offering designed to solve the widespread challenges of sprinkled data integration from multiple systems, physical locations, and diverse trading partners. SAP MDM should ensure information integrity across the business network by allowing companies to consolidate, harmonize, and centrally master data in heterogeneous IT environments. In the ensuing months in 2003, SAP also added SAP Mobile Infrastructure (SAP MI).
However, the recently released 2004 edition of NetWeaver is the first version that integrates the platform's ten components and that offers these solutions/components in a synchronized release cycle, meaning that most (with the exception of SAP MDM at this stage) of the components are delivered in a single package. SAP NetWeaver 2004 also brings new functionality, including a new business process engine in SAP XI, the ability to integrate radio frequency identification (RFID) data into SAP software. It also has full support for Web services-based provisioning and consumption SAP Web AS. The platform also features ad hoc workflow capabilities in SAP EP and the first widespread use of Web Dynpro, a Web-transaction application that enables the creation of optimized forms.
While the more detailed analysis of SAP NetWeaver 2004 and all of its components may come in separate notes, the focus of this one is SAP's all the rage effort to develop effective master data management for enterprises with multiple SAP instances, third-party and legacy applications in place. The vendor is betting on its data warehousing, SAP Business Warehouse (SAP BW), and content integrator tools to help standardize data residing in these disparate systems. Enterprises are becoming aware of the need to clean up their data acts to capitalize on more important efforts like demand aggregation and supply chain streamlining, and SAP is obviously vying for its ability to provide these services to them.
This is Part One of a five-part note.
Part Two will continue the event summary.
Part Three will cover the market impact.
Part Four will look at SAP and A2i.
Part Five will discuss challenges and make user recommendations.
SAP Acquires A2i
Thus, having seemingly no longer been under the flirting acquisitive eye of Microsoft, mid-July, SAP announced that it has acquired substantially all of A2i Inc a Los Angeles, California-based (US), privately-held software company. A2i Inc has, since 1993, developed and marketed xCat, the platform for enterprise-wide product content management (PCM) and cross-media catalog publishing, but with the touted simplicity and accessibility of desktop applications. As a result of the transaction, SAP believes to have acquired an experienced team with deep domain expertise and a top-notch solution with proven success in a wide range of verticals including industrial goods, manufacturing, automotive, medical and retail, which should help it broaden the MDM capabilities of SAP NetWeaver. The acquisition is part of SAP's continuing strategy to identify and selectively acquire businesses that can help it deliver the most innovative suite of products available, helping customers address specific business challenges for competitive advantage. Financial terms of the agreement were not disclosed.
True to the strategy of SAP NetWeaver as one unified platform, the A2i xCat solution will eventually become a fully integrated part of the SAP NetWeaver stack, eliminating the need for customers to engage in technology integration projects. Supposedly available in late 2004 as an update to the 2004 version of SAP NetWeaver, SAP MDM should incorporate new capabilities gained from the acquisition of A2i's xCat suite. Specifically, xCat will complement and extend the existing capabilities of SAP MDM with comprehensive support for enterprise-wide PCM, more powerful data aggregation and harmonization, and improved Web-based electronic catalogs for both sell-side and buy-side (procurement) deployments.
The enhanced solution should also add entirely new functionality in the areas of high-performance search, intelligent image and document management (DM) and print catalog publishing. In addition, illustrating the capabilities of a well-designed horizontal platform that can be used to deliver vertical solutions, SAP plans to deliver an integrated global data synchronization (GDS) solution for the retail and consumer product vertical markets that conforms to the EAN.UCC standard with specific support for the UCCnet and Transora data pools.
Rather than addressing the market with point solutions for product or customer data management, SAP and A2i claim to share a common vision of an open technology platform approach, but with complementary products. Adaptable to the needs of a broad range of vertical industries, the extended SAP MDM solution will purportedly be designed to manage any kind of master data and to be seamlessly integrated into a customer's existing enterprise architecture, possibly eliminating all data duplication and making centralized customer, supplier or product information available to other applications across the organization.
Importance of PCM
Moreover, according to both vendors, true PCM means more than just the centralized repository to eliminate data duplication with a limited nugget of functionality; rather, this repository must be capable of storing all product information. The system must be more than a point solution or an island. It must also offer high-performance access to that information, and it must include tightly integrated functionality that can be used to drive all crucial enterprise initiatives.
First and foremost, the PCM should revolve around a single centralized repository of product information. It should be the "system of record" for all non-transactional product information and organizational intelligence about products, and eliminate data duplication and system redundancy across the enterprise. In effect, it should be the "ERP for product information" containing not only "rich product content", but also other types of related information, such as supplier information, as well as one or more supplier-specific sub-records of sourcing information for each product that allows the PCM to simultaneously drive both sell-side and buy-side initiatives. In other words, the rich product content managed by the PCM must be much more than simply transactional data about each product from the ERP or product master file (e.g. a part number, a description, and a price).
For a detailed discussion of enterprise content management (ECM) and PCM, see Mainstream Enterprise Vendors Begin to Grasp Content Management.
This concludes Part One of a five-part note.
Part Two will continue the event summary.
Part Three will cover the market impact.
Part Four will look at SAP and A2i. Part Five will discuss challenges and make user recommendations.