Tally to Challenge SAP in $18bn Software Market
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By Tony Glover, The Business, London  Sep. 17--German-based business software giant SAP is about to face fierce  competition from aggressive Indian software developer Tally.
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(InfoWorld) - In search of new markets and customers, SAP AG is developing a new breed of hosted, on-demand products and looking at ways to make its complex business software easier to use. Vishal Sikka, SAP's chief software architect, talked about one of the company'sfirst on-demand offerings, its software-as-a-service philosophy, search functionalities in enterprise software, Web service standards and more in an interview. The interview comes ahead ofÂ next week's Cebit trade show where customers will have an opportunity to see a brief 15-minute demonstration of SAP's planned new suite of hosted, on-demand midmarket applications, known internally as A1S. The Walldorf, Germany, vendor hopes to launch the product later this year. IDGNS: What is so different about designing an on-demand product, such as your new CRM offering? Sikka: There are a few things that are fundamentally interesting. One is the better economics you can offer by hosting. This is more a function of how much you can leverage the underlying stack technologies -- the different hardware -- below the application layer. Another aspect is the time to get up and running. This a matter of how closely you can get the software to reflect the way customers do their business. A CRM on-demand solution for an insurance company in the U.S. is very different from a CRM on-demand solution for a company in Thailand. IDGNS: What specifically is so different in the design of an on-demand product? The level of prefiguration, number of functions, ease of use? Sikka: Exactly. What you see in our CRM on-demand offering is a significantly easier product to use through ways such as preconfiguration, fewer functions and taking massive advantage of underlying infrastructure. You'll see us do things that go far beyond Salesforce.com. You'll see us starting to work with some of the "cloud" platforms like Amazon and Google. We haven't yet announced any relationships but you'll start to see us doing things of this sort. IDGNS: What role will the software-as-service model play in SAP software across the board? Sikka: We look at it as another deployment option. When you look at SAP, the breadth of functionalities that we offer across our customers, industries and nationalities is very vast. One size doesn't fit all. We're using a wide variety of deployment options. For a certain class of processes, it is advantageous to offer that software as a service. For other processes, it may be better to offer our software as an on-premise model. IDGNS: Are there any limitations in designing software-as-a-service products? Sikka: You have to look at the trade-off between the ability to customize and share data. IDGNS: Will your vertical applications disappear as you move toward intelligent xApps? Sikka: No. Our xApps augment vertical applications. They give companies the ability to build the last mile; they're more narrowly defined applications that tend to leverage existing applications. IDGNS: What about your proprietary programming language ABAP? Will it fade away soon? Sikka: I want to take this opportunity to demystify something. In the age of the enterprise service-oriented architecture, the whole programming-language debate is a very big red herring. Programming languages are an area of constant innovation. Interestingly, what we find in our world is that applications live a lot longer than programming languages do. For instance, Sabre, the application used for airline reservations, is still written in Cobol, even though the last compiler was written over 20 years ago. IDGNS: So ABAP is here to stay? Sikka: You won't see ABAP going away anytime soon. Why? Because a lot of the application code that our customers use is in ABAP. It has a very, very reliable, high-performance underlying platform that is far better than anything we have seen in the market. You'll see ABAP for a long time, but you'll also see more Java because certain applications are best written in Java. And you'll see us using other languages. We do a lot of work in Microsoft programming models. Our approach toward programming languages is to make the programming language distinction irrelevant. IDGNS: How about enterprise search? Do you have any new developments in the pipeline? Sikka: This is an ongoing development. What you have seen from us so far is early thinking in this area. A lot more is to come. You will see enterprise search evolving around different fronts, such as contextual searching. We own the application so we know who the user is, what the user's role is and what the user is authorized to see. IDGNS: What about the cooperation between Microsoft and SAP? What are next steps with Duet and what are the challenges? Sikka: The challenges are always there when you bring two big companies together, like Microsoft and SAP. We have different development philosophies. Microsoft is much more volume oriented and more consumer focused. But we have a great relationship with them. The Duet product is an example. Over time, you'll see Duet expanding in many interesting ways to cover a much wider set of scenarios. You'll see us bringing it closer to our xApp composition platform, so it will be much easier for customers to add on to it. You'll see us working even more closely with Microsoft moving ahead. IDGNS: What about Muse. Any new developments on the user interface front? Sikka: This is an ongoing effort toward rethinking our UI approach. To understand the overall user experience and direction, you have to step back and look at the context in which customers use SAP applications. This is very broad. There are people who are on the factory floor. There are truck drivers, mobile phone users, notebook users and desktop users. We're reaching out to end-users in whatever context they're in. Duet is example. A lot of work happens inside Microsoft Office. Of course, a big area where SAP users -- whether a payroll clerk or an accounting manager -- spend a lot of time is in front of a SAP screen. We want to expose those users to a rich client. This is what Muse is. IDGNS: How are your efforts moving ahead to create a developer community as passionate as the one driving the development of open-source software? Sikka: Having a passionate developer community is something we're extremely interested in. The SAP ecosystem has been around for a long time. Thousands of companies have developed add-ons and we're encouraging this. Beyond that, we're extremely interested in developing efficiencies. We have distributed labs across the world. We have done a lot of thinking in how to optimize the benefits you get from a distributed, decentralized development network like the one we have. IDGNS: Do different regions bring different expertise to the picture? Sikka: Yes, across the board. We see a lot of Linux expertise in China, a lot of mobile expertise in India and Windows expertise in Israel. I don't want to stereotype areas but you see a natural coalescing of skills in different areas. It makes sense to have development in those areas. Â
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India was the fastest growing market for SAP last year, with licensing revenue increasing more than 100 percent over the previous year, a company official said Wednesday.SAP more than doubled its number of customers from 1,350 a year earlier to 3,024 in December, said Ranjan Das, SAP&#39;s president and chief executive officer for the Indian subcontinent.SAP did not disclose its revenue from India last year or the percentage of the country&#39;s contribution to SAP&#39;s global revenue.SAP has its largest product development operation outside Germany in India. The company also offers services to customers worldwide from India.India&#39;s IT market&#160;was valued at $9.6 billion last year, with hardware accounting for 54.9 percent, services 39.3 percent and software for 5.9 percent of revenue, according to research company Gartner.SAP is hoping to sign up 100,000 customers by 2010, and India and China will play a key role, the company has said.
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SAP AG  unveiled a  long-awaited line of Web-delivered software on Wednesday that  will radically change the company's business model and may  shake up the Internet software arena.
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German business software vendor SAP AG and chip maker Infineon Technologies AG have launched a new software management system for connecting RFID (radio frequency identification) hardware and software from multiple vendors, the companies announced Tuesday.
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In a move to strengthen its portfolio of analytic applications, SAP has agreed to acquire privately held Pilot Software, a maker of strategy management software based in Mountain View, California.
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Business software maker SAP, which employs 450 people in Dublin and Galway, has said that a strong performance in its European activities helped boost earnings in the third quarter, which came out higher than analysts&#39; expectations.
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The business software maker hopes to prod rival Oracle into raising its current bid by $1.5 billion.
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Oracle Corp.  posts  quarterly results next week with investors watching for signs  of further strength in its business applications software as it  chases industry leader SAP AG .
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InfoWorld - Business software vendor SAP has added an offering to its growing suite of quickly deployable applications aimed at helping businesses manage specific tasks across diverse industries.
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Business software supplier SAP is offering customers a new service to ensure the security of their SAP systems, the company said on Wednesday.
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In a move to strengthen its portfolio of analytic applications, SAP AG has agreed to acquire privately-held Pilot Software Inc., a maker of strategy management software based in Mountain View, California.
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(InfoWorld) - SAPÂ is stepping into uncharted waters with the launch of itsÂ hosted business applications service, codenamed A1S,Â on Wednesday. The move will give it a head start over Microsoft and other rivals, but could also mean SAP learns the hard way that offering hosted ERP on a wide scale is difficult to do. Offering business applications on demand, also called software as a service (SaaS), is not new. But most services, including those from trailblazer Salesforce.com, have focused on customer relationship management or human resources management, only a part of ERP (enterprise resource planning). Those functions are easier to offer as a hosted service, since managing sales and payroll tends to be fairly standard across industries and countries. ERP as a whole is more complex, involving tasks like supply chain management, procurement and accounting, for which requirements and regulations can vary greatly. "It's less standard across industries, but even more importantly across geographies. The regulatory differences are profound even between the Netherlands, Belgium, and Luxembourg," said Bo Lykkegaard, a research manager with IDC in Denmark. Even the existingÂ leader in hosted ERP, NetSuite, has found it difficult to offer the services widely outside the U.S., according to Lykkegaard. "They've been selling mostly CRM internationally, which is easier to localize because it's mostly a question of currency and sales tax." "Hosted ERP is still nascent, and that's what A1S is largely about. That's what makes the A1S launch today so interesting," he said. SAP executives are giving the first public demonstration of A1S, aimed at midmarket companies with up to about 2,000 employees, in New York on Wednesday. They are also expected to unveil the name for the service and possibly pricing. The software is being tested by a handful of customers now and is likely to be rolled out gradually next year starting in the U.S. and parts of Europe. The complexity of hosting ERP software has prevented Microsoft from announcing plans to offer its Dynamics ERP applications as a service, although its hosted Live CRM software is being released this quarter. "Software as a service makes a lot of sense for CRM, because the offering typically goes in with very little customization -- a sales process is a sales process," Klaus Helge Andersen, corporate vice president for Microsoft Business Solutions, said in a recent interview. "ERP has more deep vertical content, and all the multitenant platforms I know about don't have a customization model that works well for individual customers." SAP is expected to show in New York Wednesday how it gets around this problem. It has touted the benefits of A1S at some length but hasn't shown publicly yet how it works. It has said it will be quick and easy for businesses to set up, with interfaces tailored for industries and users. And it promises to open a new market for ERP for smaller companies wary of its complexity, much as Salesforce.com opened doors for CRM. Lykkegaard has seen A1S and said it is built from the ground up as a hosted service, and that SAP has done much to make it easy to use. Customers can look at the software on the Web and try configuring it before they purchase it, "so what used to be a presales exercise the customer can do for themselves," he said. "Then when you configure a business process it's all model-based, so you choose a business process and the user interface will change correspondingly. It's procedure driven." "They truth will be in the details, and we'll see that when some of these midsize companies start to work with the software," he said. Besides NetSuite, SAP will face competition from many small companies offering hosted ERP in local markets. In addition, Deloitte & Touche has been offering hosted ERP using Microsoft's Dynamics software in some European countries, Lykkegaard said, although Deloitte declined a request to discuss it. The rewards are potentially big. IDC projects revenue from on-demand applications to increase almost 60 percent in 2007, and grow at a compound annual rate of 32 percent over the next five years. In 2006, hosted applications accounted for about 3 percent of all software applications revenue. That will increase to 10 percent by 2011, Lykkegaard said. "Keep in mind that's revenue from licenses and maintenance, not just new software licenses, so it's a very profound impact," he said.
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Oracle Corp. chief Larry Ellison is girding for a showdown with business applications software leader SAP AG and becoming more friendly with frequent rival IBM Corp. as his software company seeks higher profits from its recently completed takeover of PeopleSoft Inc.
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IBMÂ hopes to bring BI to a wider audience of midmarket customers with a new software stack developed in partnership with Business Objects SA, industry sources said.
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Vishal Sikka, SAP's chief software architect, describes the company's software-as-a-service approach.
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Analysts say that SAP is setting unrealistic sales goals for its long-anticipated hosted ERP system, which will be available next year.