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6/9/2009
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SAP Unveils SaaS Strategy

SAP's new head of on-demand software applications for large companies provides the first details of SAP's strategy for delivering subscription-based apps to Business Suite customers.

John Wookey, SAP's new head of on-demand software applications for large companies, provided the first details of SAP's strategy for that market in an InformationWeek interview on Tuesday.

Here's what SAP customers can expect in the coming months: function-specific software applications, available by subscription, that plug into customers' on-site SAP Business Suite systems, and that SAP will host for customers using a multitenant architecture.

Wookey said he'll have groups of developers creating these software services using the agile development method, resulting in rapid feedback from early users.

That will increase both the speed and number of on-demand apps SAP can bring to the market compared with what it could do if it were using more traditional development methods, he said.

SAP likely will introduce these products in groupings -- or "waves," as Wookey called them -- with the first group partly in the marketplace today.

Acquisitions also play heavily in SAP's software-as-a-service strategy, including its purchases of Frictionless Commerce, Clear Standards last month, and just last week SkyData Systems, a developer of CRM applications for mobile phones. All of these companies are involved in on-demand software services, or are run by executives with that experience.

However, SAP won't develop software services that compete directly, as independent SaaS applications, with companies such as Salesforce.com, Concur, and Ariba, Wookey said. Rather, all of SAP's on-demand apps will be designed as extensions of Business Suite.

They'll be built on a multitenant architecture that was developed by Frictionless, a provider of supplier relationship management software services that SAP acquired in 2006.

"We do understand the on-demand marketplace, we're very committed to it, and we have a pretty unique strategy to how we're attacking it," Wookey said.

Last November, SAP hired Wookey to head up a new initiative to develop SaaS for large companies. It was an intriguing development, since Wookey formerly headed up application development at archrival Oracle and was a longtime member of Larry Ellison's inner circle, before leaving Oracle for undisclosed reasons in late 2007.

The hire also indicated that SAP was getting serious about developing a strategy for software-as-a-service for large companies, which former CEO Henning Kagermann first discussed in an interview with InformationWeek one year ago. Until Tuesday, Wookey had not been available for media interviews.

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