SAP on Wednesday introduced a new product configuration named mySAP ERP, a third option for customers who before now followed either the SAP R/3 route or the elaborate mySAP Business Suite road map.
Analysts praised SAP's attempt to bring ERP applications such as financials, human resources, order management and procurement to customers who normally would not have been able to buy them for reasons of cost or complexity.
However, those same analysts said SAP needs to make it clearer to potential customers how the new mySAP ERP product can be applied to their business needs.
The new mySAP ERP package combines SAP's R/3 Enterprise with the company's recently announced NetWeaver strategic platform.
"I do think it's a good move for them," said Yvonne Genovese, a research director for Stamford, Conn.-based Gartner Inc. "The bigger issue for me is that I believe the way they announced it is going to cause customer confusion."
Wednesday's announcement, made at the CeBIT technology conference in Hanover, Germany, apparently was delivered before the SAP sales force was up to speed on the new package, said Genovese, who questioned representatives about how the technology would be used in real-world enterprise scenarios.
This sort of confusion has been a problem for SAP in the past, Genovese said. In addition, major announcements made by SAP in Europe tend to get confused as they trickle over to the United States, she said, and many American customers wind up feeling left out of the loop.
SAP CEO and co-chairman Henning Kagermann heralded the mySAP ERP package at a press conference, describing it as a "deploy-as-you-go package, which enables companies to implement only the business functionality they need, when they need it."
The mySAP ERP package does not offer customers new technology. However, mySAP ERP is more than just a renaming of products that already exist, analysts agreed.
"I think this is a big deal, and I think customers are going to think this is a big deal," said Boston-based AMR Research Inc. senior vice president Jim Shepherd. "I think SAP is just waking up to the fact that they had a problem.
"The fact is, mySAP was just too big for this market. Most companies in this economy are just intimidated by the scope of this thing. Before this, there was no intermediate choice."
Shepherd added: "The R/3 customers, they had a horrible decision to make. They could continue down the R/3 path with R/3 Enterprise. But lots of companies were concerned," he said, that the Enterprise choice would take them away from the mySAP business suite, where SAP has been investing so much energy.
The mySAP alternative, though, meant companies had to "commit to CRM, PLM, SCM," Shepherd said.
In a research note AMR released Wednesday, Shepherd wrote that mySAP ERP is comprehensive enough to replace most legacy systems and provide a "great foundation" for future extensions.
Because the mySAP ERP package is based on the NetWeaver platform, it includes business intelligence and strategic planning, a portal infrastructure, and Web services-based architecture and integration capabilities, Shepherd said.
Still, Shepherd said, confusion is inevitable.
"I think there will be a tremendous amount of confusion," he said, due to the large number of upgrades and license renewals slated for SAP customers in 2003 and 2004, and the fact that many customers already own portions of the package.
"They are going to have to sort out what they get credit for, and what they don't," Shepherd said. "Then there [are] going to be questions about what it means to make periodic enhancements to R/3 Enterprise." For those reasons, it's too early to be able to estimate the cost of the package for customers, he said.
Many questions remain, Genovese said, especially for an installed base that was recently issued a support deadline and now are going to have questions about whether the route to mySAP ERP involves the same upgrades as the one they were planning to take to R/3 Enterprise.
Shepherd agreed, saying: "There are still a lot of unknowns."
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