Five things about SAP's strategy you need to know

Many don't pay enough attention to the German software giant's strategy for updating bet-your-business applications

It's critical that large enterprises, especially, must take a very long view of their application strategy. "One of the important issues for large customers is knowing what happens after 2013," Shepherd writes. "The SAP Business Suite looks stable until then, and [customers] like the idea of regular enhancement package releases rather than major upgrades. That said, they live in fear that after 2013 they may be faced with another product transition like the one from R/3 to mySAP."

Shepherd predicts that the current Business Suite will remain SAP's flagship product line well beyond the 2013 maintenance window. "While the mySAP.com product was officially launched in 1999, development just recently completed on a fully SOA-based suite, and there are still a significant percentage of customers that haven't upgraded from R/3," he notes. "Launching another new product would unduly jeopardize that very important base. Furthermore, SAP is under no pressure from its customers or its competitors to move to a new technology and it is unlikely to be in the next few years."

As to SAP's Business ByDesign on-demand software offering targeted at SMBs, Shepherd writes that SAP has many large customers that need a smaller and simpler application that can be easily integrated to the Business Suite. "CIOs regularly face the question of what to do about autonomous divisions, smaller sites in remote locations, new acquisitions, and joint ventures. Incorporating them into the global, single instance of SAP is often an unpopular option that may be financially or technically impractical."

Shepherd adds that "Business ByDesign, in either a hosted or on-premise form, should be much more attractive to the users than the corporate system and yet much easier to integrate than a third ERP application."

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