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SAP xApp vendor sees future in composite applications

Smaller vendors such as MCA Solutions fill gaps in either SAP horizontal or specific verticals with composite applications, according to an analyst from Forrester Research Inc.

Robert M. Salvucci, CEO of MCA Solutions Inc., is bullish on his company's prospects as it joins hands with SAP to sell a composite application aimed at making company asset tracking more efficient.

We're bridging the gap between planning and execution systems.
Robert M. Salvucci,
CEOMCA Solutions Inc.

A composite application combines multiple services, enabling companies to tap into data from various SAP applications and data from third party software to address specific issues.

Salvucci, who broke away from his role as alliance director at SAP America Inc., believes more companies will save on the costs associated with managing service parts and other equipment used to service businesses in the aerospace and defense, semiconductor, industrial and medical equipment industries.

"We're bridging the gap between planning and execution systems," Salvucci said. "We provide forecasting and optimization tools that make sure companies have the right levels of inventory out there."

For example, if a machine breaks down in the field, companies need to be efficient about getting the right part from the company warehouse to service that equipment. Having just the right number of parts in the best locations results in big savings, Salvucci said.

"We'll feed information back to SAP's execution systems for ordering parts," he said, "and we also keep track of machine failure through SAP's [Partner Relationship Management] system."

SAP is working to highlight independent software vendors, such as MCA, which have found a niche market and want to gain a foothold in the SAP ecosystem. SAP's strategy is to find smaller vendors to fill gaps and product coverage holes in either horizontal or specific verticals, said Ray Wang, principal analyst at Cambridge, Mass.-based Forrester Research Inc.

"They wisely have chosen to partner and build out through xApps and NetWeaver and their Partner Edge programs," Wang said. "Of all the vendors, they have one of the most clearly defined roadmaps."

SAP has changed the longstanding impression among small independent software vendors that it would quickly consume their niche technologies, Wang said. Part of the strategy is to lay out clearly defined boundaries and ground rules for partners to maintain a strong relationship, he said.

Currently, half of MCA's installed base is in non-SAP environments, Salvucci said, adding that the partnership exposes the company to a larger market and could result in joint planning and development with SAP on future products.

"The benefit for SAP customers is that we're going to engineer interfaces and that will take that burden off the customer," Salvucci said. "The longer-term benefit is through joint planning and development with SAP and looking for areas where we can build robust applications."

SAP says it has about 1,000 ISVs actively developing applications on the NetWeaver platform. The company has been working to foster development of composite applications on NetWeaver, and in May it introduced a $125 million venture fund meant to boost ISV development on the NetWeaver platform.

The new fund, Wang said, will give SAP a stake in fledgling software vendors that develop innovative products on NetWeaver.

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