SAP, already the biggest business application maker on the block, wants to bulk up even more — and it's turning to smaller software companies for help.
This spring, the company intends to publish a software development kit to help outside application providers tap into its products. At the same time, it will outline plans to create a partner network, or "community process," to shape programs built around its NetWeaver infrastructure software, company executives said.
The strategy represents a bold shift for SAP, a 33-year-old business with 25,000 customers. Rather than building all of its software itself, the company will provide a development platform and rely on other software vendors and its corporate customers to influence the direction of its products, said George Paolini, the company's senior vice-president of platform ecosystem development.
"[SAP] really is intent on becoming a full-blown platform player in the industry," Paolini said. "We think the next big wave really is a platform for business processes, and this will be it."
Analysts say that middleware platforms will be one of the most contentious battlegrounds in the coming years, which is partly why NetWeaver, the infrastructure software that underpins SAP's packaged applications, is so strategic to the German software behemoth.
Corporate customers are expected to spend a great deal of money on such infrastructure software and tools for creating new applications in a more flexible and cost-effective way.
With its NetWeaver platform initiative, SAP hopes to spur revenue by getting third parties to add to the catalog of products tied to its software. The company's suite of packaged applications is already widely installed among large and midsise corporations. More add-ons, and the simpler upgrade process promised by NetWeaver, are vital to driving futures sales, according to analysts.
To help make NetWeaver a viable platform, SAP hired Paolini, a former Borland Software and Sun executive, in January.
His task is to establish a forum where independent software vendors and customers from different industries will improve on the current NetWeaver lineup, using procedures similar to those used by the Java Community Process or the Eclipse open source foundation. In this vision, software vendors will base their products on NetWeaver and customers could lobby for new features.
An indicator of SAP's commitment to NetWeaver came in a companywide reorganisation three weeks ago. Shai Agassi, an executive board member who had been heading up development of NetWeaver, took over product development and marketing for all of SAP's business applications as well.
Despite the company's stated dedication to a partner "ecosystem" around NetWeaver, SAP faces a number of challenges in pulling off its vision, analysts said.
Opening up its software for others to build potentially competitive products is a major cultural change for SAP. In addition, the company does not have a track record of sustaining long-term partnerships with independent software vendors, company observers said.
"It's a very radical, extremely different approach to the whole software world," said Joshua Greenbaum, an analyst at Enterprise Applications Consulting. "SAP can develop all the great technology in the world, but they have got to get their partnership chops in line — that's where the rubber meets the road."
