SAP offers details on new e-commerce software

SAP has provided more details about its emerging e-commerce plans, saying that a suite of software that supports online business is due for shipment by the end of September.

The release of System will be accompanied by a new approach to packaging and pricing that SAP executives said was being developed nearly a year ago. The German vendor is putting together a wide range of software bundles that are supposed to meet the business needs of various workers, and the company will then set different license fees for the bundles.

Gunther Tolkmit, a marketing vice president at SAP, said about 120 of the so-called "business scenario" bundles will be in place by September, when System is due to be demonstrated at the company's Sapphire '99 user conference in Philadelphia.

However, Tolkmit added that SAP doesn't plan to price each of those bundles separately. That "might be a bit complicated" for both users and SAP's sales force, he said. Instead, the company will group multiple bundles together in a smaller number of licensing tiers that are still being determined.

In addition, users who buy System for internal uses only will still be able to pay license fees based on the number of workers that have access to the software - the traditional way SAP has priced its flagship R/3 line of ERP applications.

The scenario-based pricing won't be extended to R/3 itself, Tolkmit said. The pricing model will include the ERP suite's finance, logistics and human resources modules, along with new online sales software, a MyYahoo-like Internet portal and SAP's emerging applications in areas such as supply-chain planning and customer relationship management.

For Sapphire, SAP is also developing up to 50 "collaboration scenarios" that spell out ways buyers of System can use the software to work cooperatively with their suppliers and customers via the Internet, Tolkmit said.

The "scenario" strategy pulls all of SAP's products back together under a single pricing structure, said John Hagerty, an analyst at AMR Research Inc. in Boston. After trying to sell different applications as standalone products, SAP is now pushing integrated one-stop shopping "to the nth degree," he said.

But for potential buyers, that could make it harder to compare the cost of individual SAP applications against rival products, Hagerty said. And the whole plan "still appears to be a moving target," he added. "It's very amorphous. I don't think SAP has all the answers yet itself."

Along with its ERP rivals, SAP is rushing to embrace the Internet and e-commerce in order to avoid being relegated to back-office plumbing roles. This week's announcement expands on one made in early May, when the strategy was first broached. Last month, SAP's executive board members swapped duties, in part to free up co-CEO Hasso Plattner to devote most of his time to the Internet software development efforts.

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