SAP eyes 'third way' for software - using SOA like a gearbox

Software isn't a straight choice between packaged and on-demand - at least that's according to SAP, the giant software vendor which has recently been saying how it will use service-oriented architecture (or, to use the buzzy acronym, SOA) to continually edge forward what its customers can do with technology.

At the German company's US TechEd conference two weeks ago, SAP product and technology group president Shai Agassi talked about building on a "stable core" of software that "drives the ability to innovate at your pace".

The key will be something called enhancement packages. These plug into that core, thanks to SOA. And that's a big deal for a company whose far-reaching software has a reputation for very large installs every few years.

Agassi told silicon.com in an exclusive interview in London on Wednesday: "Our customers are telling us 'don't touch the core, don't disrupt my core business more than every five years - and by the way, I need innovation every three months'.

"So think of SOA as a gearbox. We'll allow the customer to choose which gear they want... by choosing which pack and which enhancement they want."

A survey of 1,500 people in both business and technical roles carried out earlier this year by analysts Quocirca found a poor understanding of SOA by many in both camps, though those that get this shift and are pushing ahead with SOA are seeing benefits.

SAP has targeted 2010 as the next big upgrade year for its core software: mySAP ERP 2005. ERP, or enterprise resource planning, can take care of everything in an organisation from payroll to HR to financials to manufacturing and more - only it's costly and has a reputation for not always being easy to implement.

Agassi said that, if anything, the importance of change in today's business climate is "under-hyped". The idea is that an organisation gets to concentrate on the minority of processes that actually differentiate it from its competitors.

How many of them understand their differentiators? According to Agassi: "About 10 per cent."

As an example, he pointed to the way Apple was able to roll out its iTunes music store in just three months, based on an SAP backbone, whereas one-time digital music leader Napster took a year and was left behind.

On a flying visit to Europe - he is normally based on the US west coast - the executive talked positively about the company's partnership with Microsoft and didn't miss the chance to disparage arch-rival Oracle. In recent years Oracle bought PeopleSoft and Siebel, both major players in business software, traditionally around HR and CRM respectively.

SAP will continue to look for smaller acquisition targets - once upon a time that's how Agassi came into the fold - but he added: "We don't believe in buying customers. We want to see benefit the day after [any acquisition], not the day before," with a nod towards Oracle's approach.

He also said Oracle customers must be "confused" about where the former PeopleSoft and Siebel products are being taken, saying "there is no real road-map".

Oracle declined to respond to these comments when contacted.

As well as its enhancement packages, a road-map of which is due soon, SAP is getting into enterprise search as well as launching Discovery Server - software for IT departments and ISVs which allows those that build around SAP products to test and get things right without having to use live systems or wait for new builds.

SAP this week opened a research centre in Belfast which will collaborate closely with the University of Ulster and Queen's University. It will focus on grid computing and is one of a number of such facilities around the world.