“What is the most important thing that SAP customers/users/etc should watch for in 2008?” Here is the response, from an upcoming Forrester report, we received from Ray Wang, Principal Analyst, Forrester Research:
SAP’s acquisition of Business Objects was out of pattern for SAP, which historically has grown organically with some small spot acquisitions. In terms of scale, the Business Objects deal will continue to be an exception for SAP – we don’t expect SAP to make other acquisitions of this size, and certainly not of large application vendors. However, SAP will be a more active acquirer of mid-size software companies with middleware products that help SAP strength its NetWeaver platform. NetWeaver lags behind the IBM WebSphere, Oracle Fusion, or Microsoft .NET application server platforms, which are the core of any service-oriented architecture. So, SAP will make some mid-size acquisitions, maybe Open Text in enterprise content management or Amber Point in runtime governance, but while it may make sense to us, we do not expect them to make a bid for BEA Systems nor become an active buyer of mid-size app vendors.
We do expect SAP to make small-scale acquisitions that will add or improve capabilities in the NetWeaver middleware tools that partners and customers need to build out last-mile solutions. In fact, SAP doesn’t need to make big acquisitions to fill these holes. SAP will no longer be the bottom-fish acquirer of small vendors ($10-$50 million in revenues) with promising technology that it can build on and extend. Instead, it will become more aggressive in buying vendors in the $100-$500 million revenue range in order to gain more mature and proven products that it can plug into its middleware portfolio. The October 17th, 2007 acquisition of YASU, a BPM tool provider provides another proof point. For this reason, the need for better tools in its NetWeaver stack such as UI, BPM, App Server, ETL, Hosting, MDM and others will drive SAP to acquire smaller vendors who provide key commoditized infrastructure solutions, while it will continue to use partnerships at the application level to drive new capability (see Figure 4).
In short, we think SAP APPS will remain mostly home grown, but middleware components will have to be acquired.
Business process and apps professional have always been able to count on SAP to provide a coherent, consistent application portfolio. Its few acquisitions of applications have been quickly converted over to and absorbed within the portfolio. SAP users can count on that to continue. However, SAP will be making more acquisitions of middleware and information management vendors like Business Objects to strengthen the NetWeaver platform and incorporate products like content management and business intelligence that increasingly will be combined with process applications. So, SAP users will have to get used to SAP adding non-application software to its portfolio, with the resulting product rationalization roadmaps to be navigated. Users of the software that SAP acquires can be confident that those products will continue to be enhanced and improved, as well as absorbed into the widely used SAP product set.
Do the words of Ray Wang resonate with you? What are your predictions for the world of SAP in 2008? Leave comments, We want to know!
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