As 15,000 customers, partners, and employees gathered in Atlanta for SAP's annual Sapphire conference in April, the enterprise software market leader, uncharacteristically, was contending with a wide range of challenges and changes.
Less than a month earlier, Product and Technology Group President, executive board member, and CEO heir apparent Shai Agassi announced his departure from SAP. That move left the company to anoint a new successor to CEO Henning Kagermann and to appoint new leaders for most of its product development functions. At the same time, even as SAP's growth has slowed, it faces increasingly successful and aggressive competition from arch-rival Oracle Corp., which, in March, sued SAP, charging theft of Oracle corporate data. And SAP was fielding mounting questions from customers about its strategy for delivering increasingly popular on-demand applications and its plans for the A1S product for small- and medium-size businesses, which is still in development.
Given all of the pressure on SAP, it was perhaps not surprising that the company's top executives at Sapphire chose to emphasize stability and unflinching confidence in the future.
"Our approach to innovation has not changed," CEO Kagermann stated in his keynote address. "We co-innovate; we innovate fast...we want to innovate without risk. That means we will do it without disruption to your business...and we will give full transparency. That means we will give you always a five-year roadmap and we will execute."
In the spirit of providing that transparency, SAP laid out its product roadmap for the next few years, a plan that, in many respects, is an extension of the one SAP described in 2003. At that time, company officials had said the company would, over the subsequent five years, restructure its enterprise suite of applications around a services-oriented architecture (SOA), enabled by SAP's NetWeaver stack of middleware and development tools.
This year, SAP will complete that SOA transition by service-enabling all of its product lines, with the exception of Business One, which serves small businesses, Kagermann said.
In 2008, SAP will introduce an extended maintenance cycle for its enterprise resource planning (ERP) products and harmonize suite elements, such as the user interface, Kagermann said. SAP is also widely expected next year to introduce A1S, a suite aimed at companies with 50 to 500 employees. Positioned for companies that are slightly larger than Business One users and smaller than users of the company's All-in-One suite -- with some overlap -- A1S will be deployed as an on-demand service and designed from scratch as a services-enabled, model-based system, said SAP supervisory board Chairman Hasso Plattner in his keynote address to the conference.
In 2009, Kagermann pledged to the Sapphire audience, SAP will introduce a new enterprise applications suite for large companies that will be based on many of the design principles behind A1S. With SOA at its core, the suite will allow SAP and its customers to more quickly and easily configure enterprise software to meet the rapidly changing needs of business, Kagermann said. This will let organizations share business processes and data more efficiently with customers and partners, a trend Kagermann dubbed "business network transformation."
To reinforce the stability and continuity theme, SAP for the first time shone a spotlight on executives who will be responsible for executing and advancing SAP's roadmap in Agassi's absence. Leo Apotheker, who was named deputy CEO and Kagermann's apparent successor following Agassi's resignation, touted SAP's extended Duet partnership with Microsoft. Others with high profiles at Sapphire included Doug Merritt, a newly named corporate officer and leader of development of business-user software; Klaus Kreplin, corporate officer in charge of NetWeaver; and Jim Hagemann Snabe, corporate officer in charge of the Business Suite and industry solutions.
Customers are buying into the company's long-term roadmap, SAP officials claimed. Thirteen thousand organizations have implemented pieces of the NetWeaver stack, up from 7,000 a year ago. And in a recent survey of the America's SAP Users' Group, 75 percent of customers said they plan to upgrade to the latest mySAP ERP 2005 release by mid-2008, Kagermann noted.
"We believe the industry is poised for growth," Apotheker told the Sapphire audience. "Our strategy isn't one of consolidation and living off the maintenance stream."
This article originally appeared in the June 2007 issue of Managing Automation.