Adam Gifford: The big names sign on for SAP revolution

If you believe the vendors, information technology is at an inflection point, even larger than the shift from mainframe to client-server computing in the early 1990s, or the emergence of Java.

They all talk about services-oriented architecture, where instead of tightly linked strings of code, computing functions are broken into discrete "services" that can be strung together into applications.

The largest business software company, Germany's SAP, which for years hammered the message that systems should be tightly integrated, is at the head of the change.

But will SAP be the one to set the standards?

From the alliances announced at the Sapphire user conference in Boston last week, many in the industry are willing to bet on SAP having a significant influence.

Adobe, Cisco, Computer Associates, EMC, Intel, Macromedia, Mercury, Microsoft, Symantec and Veritas all signed on to license Enterprise Services Architecture, SAP's blueprint for services-oriented architecture.

This will give them access to SAP's catalogue of technical information on enterprise services, development tools and information needed by developers such as data schemas, user interfaces, application models and security features.

There is considerable self-interest involved. SAP is a major driver of IT spending in the world's largest organisations. As it pushes into the mid-market (companies with under $1 billion in revenue) more vendors will be drawn into its sphere.

Leading the charge for SAP are its chief executive, Henning Kagermann, and the entrepreneurial president of its product and technology group, Shai Agassi, who has breathed fresh life into SAP since it bought his TopTier business in 2002.

SAP launched its Enterprise Services Architecture two years ago with a product called NetWeaver, which ties together its technology with the offerings of other vendors, cutting down the time and cost of implementations.

NetWeaver has grown from an integration platform into a substantial middleware stack and the platform for future applications.

Newer SAP applications such as customer management already run on NetWeaver, with no need for its older R/3 system. Within the next two years, all the pieces of R/3 will be broken out as services.

Under the previous computing architecture, R/3 was a monolithic application with a huge number of features and functions built in. Highly paid implementers mapped an organisations's data and processes to the software and turned on the features that were relevant.

If the organisation wanted to incorporate other vendors' software or build in processes that were not in SAP, considerable time and expense were involved.

Kagermann says the next step to Enterprise Services Architecture is to make NetWeaver a business process platform.

"This is about business, it is not about technology any more."

The first application on NetWeaver Business Process Platform will be mySAP All in One, a template-driven version of SAP's ERP aimed at small and mid-sized customers. The new architecture is model-driven, meaning application developers should be able to diagram the way they want business processes to work, and the code is generated underneath.

Agassi says the application programming interfaces have been dumbed down to text, to simplify communication between users.

The highest-profile collaboration is Mendocino, a joint development with Microsoft that will allow people to use desktop applications such as Excel and Outlook to interact directly with SAP systems.

Microsoft estimates more than US$2 billion a year is spent swapping data between its applications and SAP, with all the risks that involves.

Agassi says Mendocino is about the user experience, rather than any concession to Microsoft's own aspirations to get a chunk of the ERP (enterprise resource planning) software market.

"Microsoft invested two months worth of cash in their ERP aspirations, to put it in context. They are still trying to find a way to take ERP and make it a generic application and a volume business.

"ERP is not Office. ERP needs to work with Office, but we are actually making the best ERP system in the world work with Office."

Enterprise computing is changing, and SAP and rival Oracle, the two largest providers of business applications, are both putting up similar compelling visions for its future.

The changes represent major challenges and opportunities for New Zealand firms. Enterprise software developers and implementers will need to learn how to work with the new frameworks. Customers will need to rethink some of the ways they use IT.

* Adam Gifford travelled to Sapphire Boston as a guest of SAP.