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6/9/2009
06:14 PM
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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.

One thing is for certain: SAP's SaaS strategy is more like the "software-plus-services" strategy described by Microsoft, in which on-premises and on-demand software coexist in customer environments. This strategy, of course, helps traditional software vendors continue to sell on-premises software, from which they collect hefty maintenance fees. But Wookey made the case that it's much more than that.

Customers prefer their users to have a common experience across systems, Wookey said, which is easier to do with a core system (e.g. SAP Business Suite) from which on-demand services developed by the same company can be an offshoot.

Second, customers require a single system from which standard business processes can be established and followed, with consistent workflows and approvals.

And third, Wookey said, a central on-premises software system helps customers avoid many data sharing and integration issues that arise when dealing with a best-of-breed mix of SaaS and/or on-site software applications. "Since we own the business suite, we can make the integration easier," he said.

Wookey said, for example, that CRM, expense management, or talent management on-demand apps from SAP are better for customers than from a third-party vendor, since "sales cycles are affected by product definition and product rules [in ERP] and expense management is affected by policies for travel, while talent management is affect by policies in the HR system."

Wookey said his development team operates like a startup company, using agile development methods and Scrum teams, an approach that fits well with the on-demand model. "It lets us iterate software much more quickly," he said.

With traditional development of on-premises software, developers might work on a beta product for months and then spend the next year or two tweaking those products based on customer feedback. The combo of agile development with an on-demand product that can be monitored by SAP offers "real-time feedback on the system," he said. SAP will be able to monitor how early customers are using various on-demand apps in development, for example, and identify problematic features much more quickly.

Across the company, SAP's on-demand apps management team looks like this: Wookey's title is executive VP of large enterprise on-demand, reporting to Jim Hagemann Snabe, who heads up software development at SAP and sits on SAP's executive board; Peter Lorenz, who heads up development for SME On-Demand, including the Business ByDesign suite; and Marge Breya, general manager of BusinessObjects, who also oversees BusinessObjects On-Demand.


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