InformationWeek

Joshua Greenbaum, a principal at Enterprise Application Consulting, agrees that success may have spoiled the company. "SAP got fat and happy," Greenbaum says. "In the early '90s, they were the guys riding in on horses with great ideas. They temporarily forgot how to be that way."

Despite this, analysts say SAP is making real progress toward offering an E-business platform for the Web. "Peel away the convoluted and fragmented marketing message and you find a fairly well-defined course of action," says John Hagerty, another AMR analyst.

That course of action includes a spate of product enhancements that SAP mysteriously downplayed in a quiet release of the latest version of mySAP.com, called May 2000, in Berlin. The updated suite includes a more-robust online marketplace platform, improved system performance, and expanded application-integration capabilities.

At the Berlin conference, Plattner fixated on the mySAP.com interface, called Workplace, which the company began shipping nearly six months ago. The emphasis on Workplace appeared to be an attempt to remedy slow adoption of the application. SAP says it has shipped more than 400 copies of Workplace. But many companies remain leery of upgrading. "Even if you want it and love it, moving up a release is no small feat," says Peter Burrows, CIO of Reebok Corp., the Stoughton, Mass., athletic shoe manufacturer. "There are training and implementation issues."

When SAP talks about having hundreds of installations of mySAP.com, it may be playing with numbers. SAP says it has more than 400 installations of Advanced Planner and Optimizer, a mySAP.com supply-chain application. What the company doesn't often mention is that tally includes 100 installations within SAP itself and SAP consulting partners, says Gordon Anderson, a VP of supply chain at SAP America. Though the supply-chain application has been shipping since 1998, only 25 customers are live with it, he says.

With the May 2000 release, SAP expanded the ways it classifies users in mySAP.com Workplace, which gives users a single point of access to SAP and other enterprise applications via a Web browser. Workplace is designed to provide a customized view of the system according a user's "role" at the company. A single user could have several roles. For instance, an individual could be designated as an employee and a purchasing manager, and would have access to employee self-service applications as well as the SAP purchasing module.

SAP started out with 130 user roles in December and now offers more than 300 roles. Roles are also the basis of SAP's new pricing scheme for mySAP.com, which charges by number of user roles rather than licensed seats. So by adding more roles, SAP potentially increases its revenue.

SAP is also putting flesh on its online marketplace software, one of the most hotly contested areas of E-business software. Though it's a nascent market, many perceive SAP to be trailing rivals Ariba, Commerce One, i2 Technologies, and Oracle. While competitors have signed highly publicized deals with multinational companies such as Ford, Honeywell, and Sears, SAP's marketplace deals have been with smaller startups such as Neoforma.com, a marketplace for hospitals and physicians, or overseas companies such as chemical maker BASF in Germany, oil producer Statoil in Norway, and consumer goods manufacturer Danone Group in France. SAP is developing the marketplace platform within a subsidiary called SAP Markets, which set up shop last month in Palo Alto, Calif., to capture customers in the United States, where the market for trading-exchange software is booming.

Enhancements to SAP's marketplace platform include support for buyer-led auctions, bidding, and classified listings. In addition, SAP is interested in partnering with Commerce One to offer a joint marketplace product. SAP would supplement Commerce One's trading platform with supply-chain collaboration capabilities and back-office integration.

While Ariba and Commerce One have cornered the market on online trading of nonstrategic goods, such as office supplies, SAP says it's ready to build exchanges for trading of supplies to build goods, or what those in the industry call "direct procurement." It also wants to enable different kinds of business transactions, such as sharing demand forecasts among supply-chain partners. "Everyone can buy pens and paper extremely well now," says Greg Ritzke, VP of business-to-business procurement at SAP. "The race is in direct procurement."

To show customers how it's done, SAP offers a template of 40 collaborative business processes that its marketplace platform can enable between buyers, sellers, suppliers, and other business partners. Examples include collaborative forecasting and planning to let supply-chain partners share demand and inventory availability information, and integrated distributor and reseller management, where a manufacturer and its distribution partners can negotiate on contracts, prices, quantities, and shipment agreements.

These enhancements may come too late for some early marketplace customers. BASF agreed earlier this year to build a trading exchange for the pharmaceutical industry in a joint venture with SAP and three other German companies. But BASF said last month it would join a different marketplace that includes BP Amoco, Bayer AG, Dow, and DuPont. BASF will continue with the SAP marketplace project, but only for nonstrategic procurement.

Statoil pulled out of a marketplace deal with SAP last month to join another marketplace. The experiences have apparently caused Plattner to rethink SAP's role in creating Net markets. "Software companies should stick to what they're good at and leave trading networks to the Nasdaqs and Wal-Marts," Plattner says.

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