In a speech at the Software 2006 event, Shai Agassi, president of the product and technology group and executive board member for SAP, said the first of the core trends is the need for a single unified platform to provide a repository of coherent services, enabling flexibility in the IT operation. He said this concept is at the heart of SAP’s ESA implementation.
The second is the move to industry-specific application suites as opposed to horizontal and best-of-breed capability because Agassi said customers will derive a higher level of value from verticalized suites. Under the existing application and license suite structure, customers pay for everything regardless of what they actually use. In an SOA world, customers pay only for what they use, which has revenue implications for vendors. SAP, along with other enterprise application vendors, is having to consider new revenue models based on processes or highly granular services.
Agassi also stressed the importance of being able to access back-office data from a familiar environment, pouring business process content into the user experience users are currently comfortable with. Our customers want basic, simple and powerful solutions, and this can be achieved through delivering an easy-to-use interface and hiding complexity in the background, he said. Agassi also highlighted the need to make use of portals or alternative interfaces such as mobile devices, RSS, RFID, analytics, and embedded devices, to bring relevant business context to the preferred user interface.
The seeds of a future clash with Microsoft lie in this trend because Microsoft is setting itself up as the vendor with the user interface expertise for accessing back-office applications.
Fourth on list was an affirmation of the importance of the partner ecosystem. We believe ecosystems that reuse common services deliver more, faster and cheaper innovation than any single vendor, said Agassi. Partners are critical to the future success of any enterprise application vendor because of their ability to reach wider and deeper and create the critical mass that reduces the risk perceived by customers buying into the vendor-based technology.
Finally Agassi reiterated a common SAP theme that IT will become increasingly strategic to the business as the pace of process innovation accelerates. The industry has changed more in the past five years than in the previous two decades, he said. And we don’t see the pace of innovation slowing anytime soon. As we approach this next wave, businesses will be challenged to adapt faster to changes in their competitive landscape in order to serve their customers’ ever-changing needs. The companies that have invested properly in IT infrastructure will have the ability to handle the market changes; the companies that invest in enterprise services architecture will accelerate ahead of competitors.
The five themes overlap with those identified by Microsoft’s Bill Gates in his keynote at the recent Microsoft Convergence conference when he emphasized the importance of a familiar interface, SOA applications, collaboration technology, business intelligence, and composite applications in terms of the development of its Dynamics range of business applications.
