SAP's New Level of e-Commerce:

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Event Summary

On December 14, 1999 during the New York E-Business Conference and Expo, SAP AG (NYSE ADR: SAP), announced the availability of new functionality for its e-commerce solutions. The announcement covers both buy side and sell side solutions.

On the buy side: The buying solution, using SAP's Business-to-Business Procurement component, supports multiparty transactions directly or via the Marketplace. SAP Business-to-Business Procurement also supports multiple back-office systems - SAP and non-SAP - as well as catalog content management services.

The buying solution will include e-business products that allow real-time integration with legacy systems and non-SAP enterprise resource planning (ERP) applications. SAP has also partnered with Requisite Technology to provide a catalog-finding engine and related content management services. This coupled with an open catalog interface (OCI), will provide customers access to third-party catalogs. The buying solution is also linked via the Marketplace, an online trading community with a business directory of more than 2,500 companies.

On the sell side: The selling solution is designed to support multiple sales channels, including selling to consumers, business partners and resellers. Customers are linked to customers using sell-side solutions based on and other vendors leveraging the XML-based SAP Business Connector. This connection enables buyers and sellers to transmit orders, invoices and other documents through their personalized Workplace portals.

The design of is based on the Internet Business Framework. That means the buying and selling solutions are web-enabled, allowing buyers, sellers, customers and business partners to collaborate in real time.

Market Impact

SAP's announcement represents a crafted approach to the Internet market. By aligning with service providers, establishing an implementation plan, and developing a rich feature set, it stands to distance itself from vendors like PeopleSoft or Baan, both of whom have yet to publish an information rich strategy document.

Recent announcements detail SAP's initiatives with service providers (See TEC News Analysis article: "The First Step in" Janauary 7th, 2000), data and hardware solutions (See TEC News Analysis article: "Oracle gets SAPed by IBM" December 8th, 1999), and partnerships to enhance the development of web based solutions.

Thus the small to midsize ERP market is exposed to a competitive web based solution threaded together by SAP. SAP is clearly on the move to capture market share in the burgeoning business to business industry. We expect further customer partnership and technology announcements within the next 4 to 6 months.

Additionally, companies such as Ariba, Concur and Commerce One continue to shape the market with unique partnerships and solution strategies. Between the pursuit of ERP companies and the digital market place vendors, the goal of highly efficient web integrated solutions is in the future. Both sides have considerable resources to offer and much to gain. Ariba and Concur offer web based HR and procurement functionality but lack the resources, installed base and robust back end integration with the major ERP products, while major ERP players have a large base, but nascent, as yet untested, web products. As a result, we expect significant advances in end to end web integrated ERP solutions within the next 9-12 months.

User Recommendations

Current SAP customers interested in e-commerce solutions should consider this option, as leveraging an existing solution may be more easily received and cost justified. We suggest smaller organizations looking to capitalize on a web based procurement and ERP solution adopt a wait and see strategy, as SAP's solution has not been proven.

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