SAP CEO stumps for simplicity

Addressing a packed gathering of customers at its Sapphire conference, SAP Chief Executive Henning Kagermann used his opening keynote speech to play up the enterprise software maker's continued efforts to streamline its applications and foster Web services adoption through its NetWeaver middleware.

The new centerpiece of the effort is the recently announced extension of SAP's partnership with rival Microsoft; the partnership centers on deeper integration between NetWeaver and Microsoft's .Net architecture.

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"We have to solve the dilemmas in the IT department and ask ourselves, are we flexible enough?" Kagermann said. "We started a journey to create enterprise business services architecture last year with NetWeaver, but to truly change takes time."

Kagermann repeatedly emphasized the concept of "enterprise business services architecture," which he defined as an array of applications components that work together to give customers increased flexibility and provide better access to corporate data.

SAP's continuing pledges to break its products down into smaller pieces is part of a larger effort to change its image. The company wants to break with its tradition of building products pegged by experts as monolithic and designed to solve as many business problems as possible, rather than work with other companies' products.

Meanwhile, the Microsoft partnership extension is meant to cater to increasing demands for interoperability voiced by the roughly 40,000 customers the two companies share. In a taped video presentation, Microsoft Chairman Bill Gates highlighted the fact that more than two-thirds of new SAP installations are based on his company's Windows operating system. Gates labeled the partnership a "road map for deeper integration" that would drive greater levels of cooperation between the two companies and their respective Web services efforts.

SAP executives downplayed the fact that the company is increasingly competing with Microsoft at the low end of the enterprise software market and said the two companies must work together to address customer-integration demands.

In an interview with CNET News.com, Shai Agassi, an executive board member at SAP, said the companies do not consider themselves to be close rivals and intimated that the software makers would continue to find ways to work together.

"Our world of customers see themselves going between NetWeaver and .Net," Agassi said. "It's our job to get the friction out of the way. That's the implication of what we announced today, enabling frictionless integration between SAP and Microsoft applications."

Agassi said another key piece of the Microsoft relationship is helping customers get ready for the two companies' next generation of technology.

"As an enterprise services platform provider, we can't build every piece of software from the ground up each time it's updated," he said. "We have to allow people to add to and enhance the software to meet shifting patterns without hesitation."

Industry analysts lauded SAP's attempt to make its products easier to work with and increase its cooperation with Microsoft.

Melinda Ballou, an analyst with Stamford, Conn.-based Meta Group, said the company needs to push the effort even further by more clearly spelling out its vision for managing the "life cycle" of its products.

"SAP had to do this with Microsoft," she said. "They've done similar things with IBM, and we're living in a heterogeneous world, so it makes sense. The missing piece is a clear framework for...giving (customers) a better idea of how to manage Web services over time."