Sunday, October 24, 2010

SAP TechEd 2010: Redeeming the NetWeaver Platform

As I write this, I’m about to board a flight home to Massachusetts from SAP TechEd Las Vegas. With SAP expanding its products into a dizzying range of areas, from mobile to on-demand to business intelligence, I’d run out of airport tarmac before I ran out of topics. Dennis Howlett has already published a pretty definitive conference review, so I want to hone in on SAP’s NetWeaver strategy.

When I arrived at TechEd, I was expecting SAP to serve up something technically meaty on its previously stated SAPPHIRE Now themes of on-demand, on-device and on-premise. SAP did that – though not in nearly as much detail as many in attendance would have liked. Particularly in the area of mobility, SAP should have offered the techies in attendance more practical details. After all, if you can’t lift up the hood at TechEd and get some engine grease on your hands, then when can you? (for more on SAP and mobility at TechEd, John Appleby of Bluefin Solutions posted a good summary). Kevin Benedict, SAP Mobility expert, pointed out that part of the problem was the lack of heavy-hitting Sybase executives at the show. Based on feedback from (and to) SAP Mentors, SAP will correct this in future SAP shows. We can chalk this one up to acquisition growing pains.

What did surprise me at both TechEds (Vegas and Berlin) was the emphasis on NetWeaver. “NetWeaver is here to stay” was one of the overriding messages of CTO Vishal Sikka’s keynotes and the conference as a whole. It's understandable, given that prominent analysts have previously raised the question of whether NetWeaver has delivered or whether it is still a catch phrase without meaningful customer traction. The questioning of NetWeaver has in turn created customer confusion and undermined confidence in SAP’s technical direction.

A good deal of the problem with understanding NetWeaver is caused by its many different usages. When NetWeaver was first unveiled in 2003, it was presented as a state-of-the-art middleware solution that would ensure flexibility and ease of integration for SAP customers managing heterogeneous environments. This aggressive vision made sense, but the reality is that NetWeaver middleware solidified into NetWeaver PI – a bulky integration hub that achieved some level of adoption (3,500 customers out of 18,000 NetWeaver customers overall), but was really only ideal for high-volume integration for those customers deeply invested in the SAP platform.

The persistent middleware acquisition rumors of TIBCO and webMethods (now owned by Software AG) were caused by speculation that SAP would need best-of-breed middleware technology to come anywhere near its initial NetWeaver pronouncements. Those potential acquisitions made for great blogging fodder, but they also provoked further confusion on NetWeaver PI – enough that I was compelled to write a clarification piece on PI for PAC last year.

Over time, “NetWeaver” expanded into different product areas. It seemed like almost any SAP technology got NetWeaver slapped in front of it, e.g. NetWeaver BW, Portals, MDM, BPM, Mobile - you name it, SAP attached NetWeaver to it along the way. Some of these products, in particular BW, achieved a significant level of adoption (10,000 customers), proving that NetWeaver did have traction. Therefore, the accurate way to look at NetWeaver is as a platform that supports a wide range of products and development tools. Middleware is one piece of a broader intent.

With Sikka and other SAP executives criticizing prominent vendors (though not by name) by arguing the “one stack” approach is not in tune with this economic environment, SAP is banking on an entirely different strategy – one based on the same vision that drove the original NetWeaver announcement: interoperability of easily scaled solutions in a diverse technical environment. No single vendor forcefeed. But, as Sikka wisely points out – single vendor accountability. Customers want flexible software choices, but they also want to know who to call when things break.

This is the enduring lesson of the best-of-breed fiascos of the past, where mixing and matching of solutions led to breakdowns in vendor accountability. Translation: cost overruns due to expensive custom interfaces, and, eventually, failed projects. SAP’s current message is: “If you build off of NetWeaver, then you can choose the solutions you want, and we’ll be accountable. Oh, and by the way, we just so happen to have the best mobility platform, in-memory technology, and business intelligence tools in the enterprise space, and we’ll have it all tied together around SAPPHIRE Now 2011.” Whether the price will be right is another question entirely.

So how can SAP fulfill this promise given that it never acquired a leading middleware vendor, and given that PI, while still fully supported, is not the focal point of SAP’s future development? The answer is that SAP made some very smart moves that anticipated hardware and technical advances. Fortunately for SAP, the technical expectations around ERP middleware have shifted: embedded analytics, cloud-based extensions, in-memory data consumption, and mobile enhancements have fundamentally changed what ERP customers expect from their middleware.

In retrospect, SAP’s much-criticized acquisitions (BusinessObjects and Sybase) are looking either brilliant or lucky or both – not just because mobility and business intelligence are two of the top spending priorities for CIOs in 2010 (generally in that order), but because more often than not, these trends are converging, with mobile analytics being one of the most popular use cases for ERP mobile extensions.

SAP can now attempt to fulfill its original vision by moving the goalposts entirely. Forget about making PI into TIBCO’s equal – instead, compliment PI with lightweight interfaces (like Project Gateway) that will allow SAP customers to easily access (and write back to) SAP data from all kinds of devices. Use in-memory technology, made possible by SAP-Sybase developments and server blade advances, to facilitate easy querying of billions of previously hard-to-access/cumbersome-to-crunch ERP records. Make it easy for SAP to use Gateway technology to offer their users the ability to consume SAP data in their preferred environments (prominent example: Sharepoint via Duet Enterprise, the first formal market offering using Gateway).

In a networked world of customers, vendors, and partners, the rules of the integration game have changed. SAP really thinks it can win this game, and that explains the newfound confidence SAP has displayed in recent months – confidence that was palpable in Vishal Sikka’s TechEd keynotes, particularly in the energetic Berlin version.

With that context in mind, SAP’s significant upcoming releases, including NetWeaver 7.3, BusinessObjects 4.0, and HANA (powerful in-memory analytics appliance), all announced with some fanfare at TechEd, can all be tied into a one cohesive vision. Sikka calls it the era of “AND”: SAP is selling its customers on the notion they can innovate on top of SAP without disrupting the NetWeaver core – thus the “era of AND”: innovate all you want. With no compromises in functionality needed for the sake of “single vendor stack” conformity.

Another reason that SAP is emphasizing its commitment to NetWeaver: despite some major hiccups, SAP remains committed to its Enhancement Pack strategy. I had the chance to ask Sikka about this during our blogger session. Sikka acknowledged that Enhancement Packs “weren’t as seamless as we thought.” Enhancement Packs are essentially mini-upgrades rather than the dreamy plug-and-play solutions we heard about in the marketing materials.

Nevertheless, Sikka told bloggers that SAP continues to see the Enhancement Packs strategy as vital to allowing customers to choose the functionality they want to incorporate without a broader scale upgrade. In the future, Sikka told us that SAP's plan is to streamline Enhancement Packs to make them lighter and even more targeted. NetWeaver is the foundation for this strategy. Solution Manager is also slated for a major new Solution Manager 7.1 release in 2011 that all the SolMan gearheads are excited about - at least from what they told me with quivering voices in the hallways of TechEd.

It was only mentioned in passing in the keynote, but Solution Manager ties back into SAP’s message of single vendor accountability on the NetWeaver platform – one set of monitoring, troubleshooting and optimization tools that are robust enough for complex SAP environments. Whether “SolMan” can deliver on this (and whether its own customers will ever truly embrace this toolkit) is still open to debate, but SAP’s commitment to “SolMan managing NetWeaver” is now another given.

SAP comes off of TechEd on a high: the technology strategy is coherent and compelling, product team morale seemed better than it had in years. Of course, on the community-building level, SAP TechEd is generally a smashing success, and this year was no exception. In my view, SAP TechEd is only getting better with the close involvement of SAP Mentors, a group of leading community influencers of which I am a part. While there are rumblings about the commercialization of the SAP Community Network and how that will impact its organic (grass)roots, SAP nevertheless comes off of TechEd on an undeniable high.

However, there are some storm clouds on the horizon. The first may come as early as October 27, when SAP will announce its third quarter preliminary results. Given the cranky economy and the comparative struggles of on-premise vendors versus SaaS in the earnings columns, disappointing news on that report would not be a huge shock.

While SAP will move beyond any short term earnings setbacks, that scenario could take some air out of the TechEd balloon and bring on another round of pundits questioning SAP and raising fresh customer doubts. Enterprise Support, a topic that received little discussion at TechEd, is not going to go away either, as long as SaaS vendors, including, ironically enough, SAP’s own Business ByDesign product (now in general release in six countries), present an arguably more compelling cost model.

For SAP to achieve the “redemption of NetWeaver,” there’s going to have to be a lot more to show at SAPPHIRE Now 2011. Forget about looking under the hood, that car is going to have to be a Mustang with a V-8 engine ready for customers to drive off the lot with their foot on the gas. That means: HANA beta customers onstage with happy stories to tell, Gateway at (or darn near) general release, and NetWeaver fully integrated with Sybase’s Unwired Platform (SUP). Best of all, if SAP can bring a 4.6C customer onstage that can show off how they were able to move more products or save piles of cash based on their ability to build off of “older R/3” using Gateway or HANA, that will be a big moment.

Then NetWeaver will not only be a platform, but a way for all SAP customers to extend beyond transactional ERP now, without a major overhaul. I don’t know if that would be the redemption of NetWeaver, but it would be a keynote I wouldn’t soon forget.

Note: SAP paid my travel/event/accommodations for TechEd. I picked up my own accommodations so I could come early and participate in SAP’s Innovation Weekend, a new 30 hour event showcasing new SAP technologies and incorporating their use into real-world business cases.

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