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Customers to see NetWeaver transformation, says SAP chief

SAP plans to use NetWeaver to make all its products service-enabled by 2007, according to SAP CEO Henning Kagermann.

SAP is well on its way to transforming NetWeaver into a composition platform that supports a portfolio of components, SAP CEO Henning Kagermann told a group of investors and analysts Wednesday.

Our enterprise services architecture gives new flexibility and new power to change business processes on the fly without being blocked by inflexible IT systems.
Henning Kagermann,

NetWeaver will be sold with all SAP products by the end of 2005 and over the next two years, SAP plans to launch its business process platform, called Enterprise Services Architecture. The goal is to have all SAP products services-based by 2007, Kagermann said.

"People can combine the best process solutions they get from SAP with the process solutions they get from others and also some custom-built software," Kagermann said during an analyst and investor conference at SAP's Sapphire international conference in Copenhagen, Denmark. His comments were broadcast live on SAP's investor Web site.

"Our Enterprise Services Architecture gives new flexibility and new power to change business processes on the fly without being blocked by inflexible IT systems," Kagermann said.

The new architecture exposes nearly all SAP application components to Web services interfaces to allow customers to easily reassemble the application components and combine them with third-party vendors.

SAP faces a challenge to communicate clearly as it transitions customers to its Enterprise Services Architecture, said Paul Hamerman, vice president of enterprise applications at Cambridge, Mass.-based Forrester Research Inc. While SAP is leading the industry in moving toward a service-oriented architecture, it has had problems in the past communicating a clear strategy to its customer base, Hamerman said.

Kagermann said SAP is committed to rolling out its new architecture systematically to ensure a smooth transition. The rollout will culminate with the entire mySAP Business Suite on the architecture in 2007.

Kagermann also outlined SAP's positive first-quarter results, in which the company gained market share against rival Oracle Corp. in the U.S. The U.S. and the Asia Pacific markets are two growth regions for the company, he said.

Also highlighted were SAP's latest slew of product announcements, which include a broad rollout of analytic composite applications spanning 25 industries and a joint product and marketing partnership with Microsoft to develop a composite application that links Microsoft Office with SAP applications.

The joint software will be sold a separate product license, and be developed under the code name Mendocino.

"We have continued our talks we had last year and spoke about interoperability between NetWeaver and .NET, and mentioned there is an opportunity to link the Office applications and SAP closely together," Kagermann said. "We also expect some faster penetration because this joint product will deliver on the request of many, many clients."

SAP also announced an extension of its partnership with IBM, which launched a version of its DB2 database management system (DBMS) that is optimized for SAP applications. While the longstanding partnership between the two companies has been successful in the midmarket, it is expected to draw former PeopleSoft and J.D. Edwards customers off of Oracle database software, with a combination of support and services packages for migrating to SAP and DB2.

"We are delivering our application on any database and any platform that you wish," Kagermann said. "Customers continue to invest in SAP because we have articulated a very clear message, and we will deliver much earlier than some of our competitors."

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