Finding the easy way in

Finding the easy way in
By Randy Weston
Staff Writer, CNET NEWS.COM

LOS ANGELES--SAP has an image problem and its founder is going all out to change that.

Long known as a company with a highly technical focus, the German software giant is now branching into new markets and is searching for a kinder, gentler identity with which to gain ground. For pursuing such markets as sales force automation demands less technical mumbo jumbo and more user friendliness than does the plant management application niche.

SAP is launching the image campaign as its latest product line, New Dimensions, starts to hit the streets. New Dimensions is SAP's new software line that targets front-office needs such as sales, marketing, customer service, and the supply chain execution and planning markets--areas that fall outside the scope of SAP's traditional stomping ground of enterprise resource planning.

But along with the new market focus, comes the need for SAP to shed its old image as a maker of highly technical software systems. Instead, SAP must persuade current and potential users that it can make easy-to-use software that even a temporary data entry clerk could be trained to use in minutes.

CNET News.com talked to SAP chairman and cofounder Hasso Plattner at a recent SAP user group conference in Los Angeles about SAP's current projects and future plans such as embedding R/3 in all sorts of devices--even a Coca-Cola vending machine.

News.com: How much of SAP's business do want to see New Dimensions encompass? And are you looking more to your existing customer base or new customers as the source of revenue?
Plattner: In three years, it should be more than 30 percent of our product revenue. Our customer base has verified that they want this, but if we can penetrate someone else's turf, all the better.

Analysts seem skeptical that SAP will be able to sell the New Dimension products beyond its existing customer base because so many other niche companies--like Vantive and Scopus in the front office space and i2 Technologies and Manugistics in the supply chain arena--have been doing this for years. Do you think SAP can get the New Dimension products up to a point that they could sell them as standalone products to customers beyond R/3's existing base?
It is not enough to make a system for existing customers. What we make has to be as good or better than the other products on the market. You can integrate systems now between existing software suppliers. The technology is there to easily integrate. We should not build software on the concept that only one vendor's software will work for a customer. You can go down on the show floor of the conference here and see hundreds of software vendors that integrate with R/3. Integration is not the major selling point.

Integration is not the major selling point? That was SAP's main message until now. This sounds like a complete philosophical shift for SAP, which made its name for R/3 on the power of integration.
It was important. It brought the industry forward. That is all true. But SAP was always about more than integration. If end users want us we have to be easy to use. The departments that do the software purchasing may love us, but they won't buy us if the end user doesn't want us.

For your partner companies, it must be a frightening proposition to make a deal with you. After all, they spend money building integration to your product and then you may turn around and decide you are going to build that product yourself and cast them aside. What do you tell partners?
We have no marketing agreements [in many areas] because we know we are going to get into that market. There are many companies with certification on R/3, but it is not like we ask them to become partners. SAP has a partnership with Oracle for the Oracle database. But that is not like Oracle as a partner is going to do anything to promote or market SAP applications.

NEXT: Every software maker for itself

Every software maker for itself

But you have many partner companies in your new Solutions Maps that direct customers to partners for features you don't supply. What do you tell these partners about your future plans?
If we put them in our Solutions Map we have an agreement with them that we will not enter their market space for whatever time frame. But we never say we will never go into their market. That market could become the most critical part of the system and our customers would demand we go there. This is an issue and we have to be as fair as possible. In a worse case scenario by a partner of SAP, the partner told customers they were more important than SAP and the relationship fell apart.

Are we talking about i2 Technologies?
That was i2. They know we are now developing software that is competing with them. But the competition is good--it drives innovation. I like the competition; it gives us a chance to show how good we are.

Sales force automation and supply chain management are the current hot trends in corporate computing. As someone who knows the industry, what do you think is going to be the next big thing?
The next trend is portable devices where the machine becomes part of the system. That's what the Coca-Cola machine demonstration is about. This is the way things are going. The machine, be it a vending machine or something else, will become an active part of the system and not just a passive one. All of these applications rely on data. Take the advanced planning system. If data is not coming in, then it is useless. Speed is everything here.

SAP is relying more and more on Microsoft Office as a front end and critical piece of its applications. How much are you willing to let Microsoft be the entry point and the first thing that appears when people go to use your product?
It doesn't matter. It is an ego problem and we aren't concerned. The interface has to be convenient for the user; if that means an Office interface, then so be it. We are doing more and more integration with Office and we are looking at Lotus Notes too. A lot of people use Lotus and we want to work with them too, if that makes it easier for users. But for now, as an active component embedded in our system, we currently only use Microsoft products.

What do you see as the No.1 area that SAP needs to work on? Where does SAP fall short?
There's never a No. 1 issue--there's a bunch. We need to be more user-centric and have a more user-centric design vs. a business process design. We are very good at business process design but we are less good at the user-centric design. The implementation issue is on the right track. We are making progress there. Knowledge rollout is a big issue for us.

What do you mean by knowledge rollout?
It means getting across all we know about the system and business processes. We have all these people who know about the product, but we can't get that knowledge to the customer and others for training, and so on. That is our biggest obstacle. We have an ecosystem of 30,000 to 40,000 people around the world. We need to do something to get information to them. To let them know about something new we are doing.

So what are you doing to solve that problem?
We have an information database. We are working on SAP internal television. We have a SAP magazine online. It's in German now, but we are now looking at doing it in English. We want to use the Internet as a transportation vehicle for that and other information.