Analysis: SAP - game over?

"We're trying to keep up with the résumés from the competition. We're the place to be right now."

So said Bill McDermott, president and CEO SAP America, at the company's big annual user conference this week. After a range and number of briefings and announcements that one would expect at such an event, the message was clear - SAP is moving forward as some of its rivals stall. Why else would staff elsewhere be seeking to jump ship?

How much truth is there to this, from one of the most important players in technology?

Just under a year ago, SAP's Sapphire conference was overshadowed by Oracle's surprise and downright hostile bid for PeopleSoft, another important enterprise applications player that had itself just announced a much more willing marriage with JD Edwards.

The past year has seen all sorts of shenanigans over Oracle's offer. Both the US Department of Justice and European Commission have decided scrutiny is in order, and now many people across the industry have lost patience and interest in the whole affair.

But quietly, almost in the background, SAP has marched onwards. While applications sales from arch-rival Oracle have been lacklustre, SAP has reported an up-tick in software revenues - up 5 per cent in the first quarter of 2004 compared to last year.

So to this week and the question of just how far SAP can go. There's no doubting the company is a class act and relatively strong versus much of the competition.

Announcements with all sorts of companies this week - both customers and partners - sit alongside technology initiatives focusing on areas such as customer relationship management (CRM) and RFID electronic radio tags, where the company, given its supply chain and retail and manufacturing strengths, will be influential.

The German vendor has also realised it must focus on mid-market organisations - those which it defines as having a mere $200m to $1.2bn in annual revenues - areas such as defence and security, and what it is calling its Enterprise Services Architecture (ESA) approach.

ESA sounds like another dodgy acronym from another vendor looking for a hook (it reads like an amalgam of so much other jargon) but it points to just how far SAP can go.

One prominent CIO silicon.com spoke to at this week's event, for all his successes with SAP software globally, was still sceptical about the company's vision. Others reading this article will know the tales of expensive SAP consultants and rollouts that have entered IT folklore.

But ESA promises to marry the language of business, particularly processes, with SAP's rather complicated technology. SAP will say it's about much more than that, covering areas such as flexibility through web services, middleware and more, but that general definition is laudable - and tough to deliver on.

Even if SAP is wiping the floor with rivals Oracle and PeopleSoft, and even beating Siebel at its own game, according to the latest CRM sales figures, the future lies with widening its potential market and competing with a company that is for now more friend than foe. Nobody has mentioned the 'M' word much at Sapphire this year - apart from an extension to an alliance - but Microsoft, at least over the long term, will doubtless loom large in areas such as CRM and the enterprise resource planning (ERP) market that is still SAP's bread and butter.

Many have indeed pointed to Microsoft as SAP's reason for calling for restraint in regulators' opposition to the consolidation an Oracle-PeopleSoft deal would mean. By the time the antitrust bodies have finished, a ruling could just be a gift to their long-time bête noire.

So SAP is doing well. Its reputation with users is perhaps better than it has been for some time. It is a software success story on a scale that is rare for Europe.

But, in the world of enterprise software, it's far from game over. Who's to say it won't be its key staff one day sending out those CVs?