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Alloy, SAP's duet with IBM, holds promise, analysts say

Alloy may sound like Duet, but analysts think the IBM-SAP collaboration holds more promise than the SAP-Microsoft one.

SAP recently revealed Alloy, a partnership with IBM on a new product that marries the SAP back end with the familiar...

Lotus Notes interface. Some analysts think Alloy will prove stronger than Duet, a similar collaboration between Microsoft and SAP.

Alloy allows customers to complete certain SAP tasks within Lotus Notes, such as approving a procurement transaction in an email -- eliminating the need to toggle back and forth between two screens. The product follows Duet, Microsoft and SAP's collaboration that extends SAP to Excel, Word and Outlook. Alloy will be available in March.

Duet was released with much fanfare, with both Microsoft and SAP putting their considerable marketing clout behind the product, and was met with considerable interest early on from SAP customers. That interest waned, however, as the two companies struggled to deal with the fact that they sell competing business applications, analysts said.

Alloy may enjoy greater success than Duet, analysts said, because it comes at a time when SAP's large Lotus customer base (one analyst estimated it at 30,000) is further along in the ERP upgrade process needed to leverage it. Also, SAP and IBM don't sell competing business applications, a situation that has hamstrung sales of Duet since it debuted three years ago, according to AMR Research's Jim Murphy.

"I think the sales conflicts are very difficult to overcome," Murphy said of the Duet attempt. "If a Microsoft salesperson has CRM in the bag, [he's] not going to be too gung-ho about selling Duet."

For more on Duet
Read how one government agency is using Duet to increase productivity

Learn more about SAP and Microsoft's Duet roadmap

Duet has been rolled out to between 400 and 500 users, according to Byron Banks, vice president of platform marketing for SAP. Duet 1.5 -- the second generation of the product -- was shipped in December. Most customers are focused on that release because it has more scalability and better performance, Banks said. Duet 3.0 is in the planning cycle.

Duet's requirement that users be on ERP 6.0 was a challenge to adoption, Banks acknowledged. About 13,000 SAP users have made the move to ERP 6.0. But as more customers are upgrading, Duet is enjoying more success, he said.

"I think Duet is doing very well," he said. "It's one of the major reasons we also wanted to do something with IBM."

Analysts agree that Alloy does come to market at a time when far more SAP customers are running ERP 6.0, but the technological foundation hasn't been the only problem for Duet adoption. It's simply been difficult to sell because of channel conflicts, Murphy said.

In contrast, IBM and SAP don't really compete.

Also, in this economy, companies are seeking tools that are quick to deploy and will increase user productivity. Lotus users can leverage processes in their SAP applications within eight to 10 weeks, Banks said.

"I think a lot of companies are starting to look very carefully -- as opposed to the ERP space -- to the office productivity space," Murphy said. "This idea is really appealing to customers. On the SAP side, they've realized they're not going to be the office productivity system anytime soon, and they need to get more tools into people's hands."

While he doesn't see anything particularly spectacular in the new tool, Murphy said it makes sense for the biggest SAP customers to take a look at Alloy. IBM has a great vision and capability for unified communications and collaboration platforms.

In turn, Alloy should remove the need for custom-coded interfaces between Lotus Notes and SAP, lowering TCO, according to Madan Sheina, principal analyst at London-based Ovum research.

Sheina argues, though, that security could present another barrier to adoption of both products. Products like Alloy and Duet lack solid security and interoperable standards, he wrote in a recent research note.

"Collaboration will always be at loggerheads with security," Sheina wrote. "And securing an SAP system is more difficult if its processes and data are being exposed via Office and Notes desktops."

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