SAP CEO: Two-thirds of customers will be on SOA by 2010

Kicking off its annual analyst event, SAP CEO Henning Kagermann said SAP is targeting the midmarket and bringing services-oriented architecture to its customer base.

LAS VEGAS -- SAP's CEO Henning Kagermann kicked off the company's fourth annual analyst summit yesterday, trumpeting its progress on delivering service-oriented architecture (SOA) and pledging to bring SAP's customer base with it.

"Enterprise SOA is available today from SAP," Kagermann told an assembly of partners, press and IT and financial analysts. SAP customers range from Cisco, EDP and Colgate-Palmolive Company to Kagermann's "favorite customer" -- a 15-seat installation at a winery.

"SAP is the only company that can provide [enterprise SOA]," he said. "In 2006, we have shipped all the products to make this happen. Now, as we approach 2007, enterprise SOA is proven, it's risk-less, it's there."

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SAP has set its sights on bringing enterprise SOA to the midmarket in 2007, Kagermann said. Additionally, by 2010, the company aims to have two-thirds of its installed base using enterprise SOA.

While Kagermann went so far as to call SAP the best ERP solution ever, it's not all bluster.

"In general, with SOA, SAP is the furthest along, and they're in the right position because they own the applications layer," said Ray Wang, principal analyst for enterprise applications and business process platforms at Cambridge, Mass.-based Forrester Inc. However, he also said comprehensive SOA is "five to seven years away."

While he did not give target figures for the number of users, Kagermann set a goal of reaching 100,000 total customers by the end of the decade, as well as an addressable market of $70 billion worldwide.

Asked how SAP planned to add 65,000 to its current customer base of 35,000, Shai Agassi, president of SAP's product and technology group, deadpanned, "Very rapidly." He continued to say that the company expects to add numerous clients from the lower end of the customer pyramid -- small and medium-sized businesses. Small businesses, with SAP's Business One application, will grow especially quickly, he said, projecting 6,000 to 8,000 new customers in the next year.

Kagermann expressed satisfaction with the company's delivery on its product promises for 2006 and said the company intends to "continue to bring innovation faster, but in an optional way," for customers.

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