SAP touts tech partnerships at conference

Kicking off its European customer conference, Sapphire 2000, in Berlin today, SAP said German technology group Siemens has agreed to a strategic development partnership with SAP to develop Internet applications for businesses over mobile telephones.

The two companies will combine research capabilities into mobile communications technologies and will integrate applications into SAP's mySAP.com e-business product and Siemens' mobile telephones. No financial details were given.

Market analysts say mobile commerce is seen as potentially one of the most lucrative forms of e-commerce, once the next generation of WAP (wireless access protocol)-enabled mobile phones gains wide market acceptance.

The move is the latest example of SAP's rush to become an Internet company. The German software maker is currently going through a metamorphosis. It traditionally built software for the back office, where computer systems handle human resources, financial data and other internal workings of everyday business. Now the company is attempting to move out of the back office and onto the Web.

But analysts say the transition is proving to be a difficult one.

In research notes today, AMR Research analysts said SAP is at a critical crossroads as it struggles to rise above its back-office transaction image and reinvent itself as an e-business market leader. But it is not acting like a leader.

SAP is using the conference to reassure customers, the media and analysts that it is serious about e-business and the Internet, but few doubt SAP's seriousness. What they doubt is SAP's ability to lead rather than follow the market, according to AMR.

Joshua Greenbaum, an analyst who heads Enterprise Application Consulting, also said he questions SAP's position in the market. He said the software behemoth continues to face significant challenges ahead, especially in trying to improve its market position in the United States.

"SAP is really trying to promote the current status quo indicative of a leadership position, but the fact is it's not (a leader)," said Greenbaum, in a phone interview from Berlin earlier today. "They definitely, at this point, are not considered a thought leader and this conference is not changing this perception."

The problem, Greenbaum said, is that while SAP has some "interesting" product developments and new strategies that can help them transform into a serious Web-based software company, it continues to struggle in effectively delivering its marketing message.

"The basic problem for SAP is a lack of market awareness," Greenbaum said. "They lack the ability to market effectively in the American mode. They're very stuck in their European honor and honesty (mode) and forget that part of this is a game and they have to play the game. If they don't play the game, they're going to get counted out. They still have to learn that lesson."

Although the company announced a number of partnerships that extends the reach of mySAP.com, analysts said the company needs to do more than just partnership deals.

Attendees were expecting to hear announcements about deep partnerships, including the rumored equity investment in and reseller deal with Commerce One, according to AMR. They were also expecting more details on the major new releases of R/3 core components and the new products, including Customer Relationship Management (CRM), Advanced Planning and Optimization (APO) and business intelligence applications.

Some analysts also were expecting SAP to confirm reports of a licensing agreement with Commerce One to resell its e-commerce software. Commerce One makes software that enables companies to conduct business with their suppliers and partners over the Internet.

The company declined comment on any such deal.

"They can't afford to shoot themselves in the foot with a Commerce One deal, but it looks like they are in the works of some kind of partnership," Greenbaum said.

With the growing popularity of building massive online marketplaces, all the enterprise resource planning (ERP) software firms, including rivals Oracle, PeopleSoft and J.D. Edwards, have been scrambling to win new business in the lucrative business e-commerce market--a market projected to surpass the trillion-dollar mark by 2003.

Oracle and SAP have developed their own procurement software while PeopleSoft and J.D. Edwards have partnered with Commerce One and Tradex--which merged with Ariba--respectively.

Although many expectations were not met today, the company did make a handful of announcements.

• The company debuted a new program to help move more of its existing customers onto mySAP.com. Called mySAP.com Starter Pack, the program will assist customers using its R/3 enterprise resource planning software releases 3.1I, 4.0B, 4.5B and 4.6B to set up e-business applications on mySAP.com.

• SAP also announced a new program aimed at start-up companies, designed to help them get up and running with a full set of business applications hosted on mySAP.com. For a monthly rental fee, which the company did not disclose, start-ups can access the new program, called The ASP Solution for Start-up Companies.

• In a new partnership initiative, the company also launched a new program dubbed mySAP.com Partner Value Net, which will provide third-party Internet commerce applications to mySAP.com customers. The company currently has 1,000 global business partners.