SAP warns of the perils of buying best of breed

Kicking off Sapphire (SAP's Asia Pacific user conference) in Brisbane yesterday, SAP executive board member Leo Apotheker warned of the perils of buying best of breed products.

Spruiking enterprise suites as the solution to costly integration, Apotheker said SAP now has product offerings to cover every part of the enterprise from the front to the backend so customers do not need to buy from anyone else.

"I understand why someone would buy best of breed but the problem with best of breed is that it stayed best of breed," he said.

"Years of best of breed investment has left companies in a mess with companies spending up to 80 percent of IT budgets on integration.

"We can offer equal or better functionality across the enterprise so why would you buy best of breed; our products are pre-integrated and out of the box."

The solution to the CIO's dilemma of costly integration isn't more technology, he said, presenting NetWeaver as the centrepiece of SAP's integration solution to tie systems together.

"Companies need to maximise what they have instead of throwing more technology at the problem; they need to leverage existing infrastructure," Apotheker said.

In his capacity as president of global field operations, Apotheker said he speaks to customers across the globe stuck with "rigid, costly IT infrastructure created from best of breed hype".

They are victims, he said, of the 'try it, buy it, throw it out solution'.

"Of course every company is different there is no generic solution you have to design your own roadmap but NetWeaver ties together people, information and processes," he said.

Taking a shot at Nicholas Carr's book Does IT Matter?, SAP executive board member Shai Agassi said innovation is the key to growth but companies are stuck spending budgets on maintaining and integrating legacy systems.

"This leaves little money for innovation and IT shops lose their value proposition within organizations they need to get back in the innovator's seat," Agassi said.

Describing SAP as an ERP company in 1998, and an applications company in 2000, he said today it is a platform company.

Asked if NetWeaver is another middleware offering, he said there is a huge difference between the one-size EAI products currently available and SAP's 'enterprise services platform'.

"We don't only ship Web services we ship the actual objects that drive the business; we are three steps ahead of everyone else and for the first time customers can get the complete product not just the pieces," he said.

Agassi cited Shell as an example; the oil giant has 100 HR systems and is seeking to move to one in a three year time frame.

"But in that time Shell will acquire more companies so it is a neverending cycle so they need the competency to integrate, consolidate and remove; flexibility in real time," he said.

Described by pundits as SAP's rising star, Agassi is currently on a 82 city tour. Australia is city number 34.

Asked about Oracle's hostile takeover bid for Peoplesoft, Agassi said SAP simply didn't care.

"We don't do things from a competitive angle; we make decisions for the good of our 25,000 customers and we are so far ahead of the curve," he said.

"There is a five fold distance between us and them so why would we care about what they're doing behind us? We just hope they don't poison the environment we are living in."

Meta Group technology research services VP Michael Barnes said SAP is certainly ahead of the pack in terms of articulating a cohesive technology platform for underpinning application functionality and business processes.

Barnes said a far more interesting battle will be in the broader infrastructure space where SAP will be increasingly butting heads with Microsoft, IBM, BEA Systems and Oracle.

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