SAPPHIRE US - SAP to 'compete like gentlemen'

SAP has been strengthening its partnerships with Microsoft and IBM while competing against Microsoft in the small to mid-size business (SMB) applications market and advancing in the middleware software market where IBM has a noticeable presence.

Balancing these relationships is one of the topics IDG News Service talked over with Shai Agassi, president of SAP's product and technology group, in an interview last week at the company's Sapphire U.S. user conference in Orlando. An edited transcript of that conversation follows.

Earlier this year Oracle Corp. announced plans for a stand-alone enterprise search tool. SAP has its Trex search technology. Any plans to make that into an stand-alone product?

We're not going to try and go into that [market]. We have deep enterprise search that can search all your application data in context. We've been at this party for three years. We'll probably beef it [Trex] up and integrate it more.

How quickly are SAP users moving from your older R/3 applications to the newer mySAP versions?

It's typically very fast. It'll be 6,000 to 8,000 customers moving to mySAP ERP [enterprise resource planning] over the next 18 months. That's equivalent to all of PeopleSoft. It's as if Oracle converted all PeopleSoft users to Oracle 11i or Fusion. That's the magnitude of what we're doing.

We still support customers on R/2 [the mainframe version of R/3.] We never stop supporting a customer.

Where does SAP stand on open-source technology?

There's a difference between what's being said and what we've done. We had the first enterprise application on Linux in September 1999, seven years before it was cool. We've invested in MySQL [AB]. We're not trying to kill them by buying up the transaction engines they use. We handed over our MaxDB database to MySQL's enterprise division [over] three years ago. We've invested in Zend [Technologies Inc.].

The LAMP stack is supported and endorsed by SAP. Oracle isn't supporting it.

LAMP's an important stack, but it's one of a number of stacks. We support the percentage of our customers deploying on it. The more deployment, the more support we'll offer. We've opened up our enterprise services repository so that users can program in any language -- Python, Ajax, Ruby on Rails, etc. We're not going to get into religious battles.

How does the tie-up between SAP and IBM work in the midmarket with SAP calling IBM's upcoming DB2 database, code-named Viper, its preferred database for that arena?

IBM is a preferred vendor, not the preferred vendor. We did a lot of early work with IBM. If Microsoft's willing to do the same work, they could be the same as IBM.

How do you both partner and compete with Microsoft?

We will compete like gentlemen. We'll come in with swords, not bombs and guns, and fence. We intend to win, period. We don't intend to give the SMB market to Microsoft. They're a great partner, but we still intend to win in the SMB space.

How does the on-demand subscription model change pricing for on-premise applications?

Pricing is an art form not a science. We won't rush to one model.

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