New Battle Foe for SAP?

In the general field of enterprise resource planning, SAP and Oracle has been on very tight competition for the last five years. Despite the very close competition, SAP has always remained number one.

But now, in the particular field of customer relationship management (CRM), SAP has meet a new and smaller but nevertheless fierce competitor in Salesforce.com

Salesforce.com has built its niche in selling of on demand customer relationship management software applications and other development platforms for enabling partners and customers to develop add-on applications which includes enterprise resource planning that can integrate with the development platform of Salesforce.com.

Similarly, SAP also plans of selling in as early as year 2008 an integrated suite of ERP and CRM software which ultilizes a a development platform for building add-on composite applications.

Both Salesforce.com and SAP are rolling out their new applications and platforms and yet they have denied any competition. But take this: During the week of September 17 when Salesforce.com unveiled Force.com as its new development platform's name in San Francisco during its Dreamforce user conference, SAP as also launching at the same times its on-demand suite Business By Design, which as the former A1S code, in New York.

SAP Deputy CEO Leo Apotheker said: "It is comparing a little hors d'oeuvre, an appetizer, and a complete three-star meal. Salesforce has a CRM application. It happens to be that the vast majority of businesses on this planet do a little more than just CRM. Our attempt is to get rid of all these acronyms. Businesses don't really buy acronyms, they buy a processes flow, a business model. We provide a complete solution and we provide a complete suite, lock stock and barrel, which is Business ByDesign] You don't need CRM from Salesforce any more. It's superfluous. No wonder Salesforce.com CEO Marc Benioff is worried. It is disconcerting. He has every right to be concerned."

The final piece of the Force.com platform will be the VisualForce which can let developers build any user interface for any application. Salesforce.com also announced that it will add two more new applications to its CRM portfolio. These two new applications will be called Content and Ideas and will be designed to appeal to a broader user base. Content will be more about Web 2.0 technologies while Ideas is move of a service for building communities where people meet and post and vote ideas.
On the other hand, SAP has been dominating the ERP software industry and is not new in full ERP integration with on-demand. Although not yet available, SAP's Business ByDesign will be able to deliver suites for common back-office functions such as finance, human resources, CRM, supply chain management, supplier relationship management and corporate governance.

SAP and Salesforce.com have been reaching the midmarket with the latter more aggressively looking for inroads leading to enterprise markets. SAP, well, has of course built a niche on the enterprise markets.

Whoever wins in this battle, if ever there is a battle, will benefit two entities: the winner and the consumers.

Web development platform for on-demand software

A couple of months ago, Google and Salesforce.com made a sensational pact wherein Google will can help small enterprises in generating sales leads while Saleforce will take its turn turning these leads into actual customers.

A few days ago, Salesforce.com announced that it has developed a new rich web platform for building on-demand business software geared towards leading to an explosion of applications which is similar that to that with Facebook.

Salesforce.com, a San Francisco based company known for its talent for coming up with great catchphrases, calls this development as Force.com which is a "platform as a service". This platform can be used by non-programmers so they can easily make very attractive online applications which will connect with other within the fast expanding Salesforce ecosystem.

This is really nothing new and as I previously mentioned, Facebook has been quite busy these past few days handling open apps like these from its huge base of social networkers. Look at online sites like craigslist.org and you will see advertisements seeking programmers who can develop Facebook applications. And Saleforce.com recognizes with the words of Ariel Kelman, senior director of platform product marketing at Salesforce.com saying: "Once you provide the openness, we think you will see an explosion of apps analogous to Facebook."


Salesforce.com, a global leader in On-Demand Customer Relationship Management is also the developer of AppExchange, an application that can host on-demand software created with partners. It is fast catching up with CRM and ERP leaders such as SAP AG, Oracle Corp. and Microsoft Corp by constantly innovating its flagship CRM service.

In August, Saleforce.com has announced that during the second quarter, AppExchange has already 48,000 registered developers after about a year and a half from its release. These registered developers are independently working or for 348 independent software vendors that have created 642 applications.

In very stark contrast, Facebook, since its launching of its Facebook Platform in May, has only ore than 3,500 applications. The success of the system could be attributed t the popularity of social networking websites.

According to Kelman, much of the code can easily slide straight into the Force.com environment without a lot of rewriting so that software vendors or companies with existing Web applications can easily do the integration into their existing systems. He furthere added that "Porting over the user-interface elements you can do very quickly, but there will be some effort involved in migrating the database and logic. But after that, the ability to change your application becomes so much more flexible."

Open platforms are fast becoming more popular internet and more and more pluggable modules can be easily downloaded online. This is great indication of collaboration among many coders online and such scheme can bring out the best creativity in people while making them earn money for what they love doing in their most flexible schedules. The continued popularity of open platform will definitely mean more robust yet flexible business applications in the months to come.

Enhancing SAP ERP 6.0

The competition for ERP applications has always been stiff among SAP, Oracle and Microsoft with many more coming in such as Salesforce which is currently in team up with the gain Google.
SAP, the world leader in ERP application, of course does not want to be outdone. To further push its products, SAP released a second enhancement product last month. This enhancement is targeted for large enterprise customers.

The enhancement package encompasses as lot of applications with the vast SAP Enterprise Resource Planning Suite. Upgrades include both horizontal and industry specific components as well as those for the core application and web services which are derived from SAP business solutions.

SAP intends to release these upgrades progressively about two upgrades every year. I think this is a good strategy so as not to overwhelm users with both expenses and learning about new upgrades. Also having to progressively release updates breaks up the massively expensive and time consuming cycle that may IT shops go through in order to have upgrades.
SAP announced its strategy in 2006 and its continuing effort to keep the ERP 6 platform stable until 2010. But for now, the problem that SAP will have to tackle is how customers will scamper to get the upgrades.

It is still hard to say how these upgrades will be accepted by customers. Although many of them say that the strategy of SAP for maintaining a stable core for several years at a time have a good effect, many customers are unsure whether they want to spend some more money or not. Those who have been implementing MySAP ERP 2004 will need to upgrade to ERP 6.0 so that they can get the switch framework functionality which is a required in order for the system to be able to utilize the enhancement packages.

SAP introduced MySAP 2004 two years ago, and SAP ERP 6.0 was introduced just last year in 2006. As of today, there are about 2,800 customers for SAP ERP 6.0. Compared to the approximately 33,000 customers that the company has on its roster, this is a tiny number. As for the MySAP ERP 2004 platform, there are about 6,000 customers.
According to Judith Hurwitz, an analyst with Hurwitz & Associates, "It's always better to have software that is more modular and easier to upgrade, absolutely. That said, these [SAP] implementations are really large. Customers are stuck between a rock and a hard place. I remember talking to a customer who said that to do even a point release is six months of work, and that's just a point release. Upgrading an entire system, you have to check and recheck every area you've done customized work to. You have to test it all."

But for my part, if it was my company that gets confused whether or not to get upgrades, my first consideration would be if my company desperately needs. I am aware that companies need to evolve. If getting SAP ERP 6.0 is beneficial to the evolution and my company can afford it without sacrificing other aspects of the business process, I would acquire it.