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Q&A: SAP Exec Fields Database Queries, Zings Oracle

Shai Agassi, president of SAP's product and technology group, talks about databases, open source, coffee, and composite applications projects.

Calm but determined, Shai Agassi had a message for analysts who gathered earlier this week in Las Vegas: "The database layer as we know it will go through radical shifts."

He was in Las Vegas to unveil updates to SAP AG's projects with Ariba Inc., Intel Corp., Microsoft Corp., Oracle Corp., and others.

Agassi, president of SAP's product and technology group and a member of its executive board, also sat down with reporters, including TechWeb's Laurie Sullivan, to explain the NetWeaver platform, composite applications projects, database commoditization, and the $1-billion-per-quarter for services the German software company expects to generate.

TW: What percentage of SAP customers use NetWeaver?

Agassi: We have 31,000 NetWeaver components installed. Depending on the layer, at some layers such as master data management, we are in the very early stages. On others such as analytics, we are in the middle of mainstream adoption with more than 10,000 installations. If you look at NetWeaver projects, for example, many layers many processes, we are looking in the next 12 months at between 5,000 and 6,000 customer implementations with multiple installations. We're hoping it doesn't go beyond that because you don't want it to become an uncontrolled growth. Most customers will start between January and May. To put it in context, 6,000 installations is PeopleSoft. To explain the magnitude of NetWeaver adoption, we're doing sort of a PeopleSoft year.

For the services market, we're estimating that between 30,000 and 40,000 will need to be deployed in the market. You're looking at a more than $1-billion-per-quarter service industry. We're being conservative saying [that]. Where have you seen a service industry grow to a billion dollars a quarter in two years from zero? NetWeaver was launched in 2004.

TW: SAP is introducing many composite applications. Do you see SAP going beyond enterprise applications and into operating systems?

Agassi: We won't do Xboxes. We're an applications company at the core and at the heart. We've never seen a reason to move to commoditized layers like operating systems. Unless we can create tremendous differentiation for the overall stack, veering off to try and take over the operating system market doesn't make sense. We went to middleware because we've always been in middleware. Throughout our history we've built middleware for our own products. We've built abstract operating systems, databases, communications, and put more application-servers installations in the market than any of the application server vendors--we just never sold them. We gave them as part of our application. When we built the next generation of middleware, NetWeaver, we needed to make a decision on whether to keep it inside, hidden where no one sees it, or put it outside. And it became obvious that the fact we didn't sell middleware complicated our customers' lives because they couldn't take what we built and build on top of it other solutions.

TW: SAP collaborates with Ariba, Microsoft, and Intel. Do you see one day collaborating with Oracle?

Agassi: We are Oracle's largest customer. And I have to tell you it's very difficult to collaborate with them. [In his closing remarks to analysts, Agassi addressed the war with rival software titan Oracle and said, it's "a war we didn't ask for and didn't declare."]

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