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SAP user show to spell out Net strategy

At the firm's annual user show, SAP joins the industry movement toward Net business by spelling out its plan for its own Internet strategy and user portal.

Nothing but Net is SAP's planned theme for its annual user show next week.

That's not surprising, since many players within the enterprise resource planning (ERP) world have turned to Internet strategies as customers start to demand new applications for doing business online.

At the Sapphire conference, SAP plans to unveil a host of applications to boost its Internet strategy, which enables firms using SAP software to buy and sell goods or offer services over the Web. The conference, held in Philadelphia, starts Monday., first announced in May during SAP Sapphire in France, is intended to provide one-stop shopping for e-commerce businesses. As reported, the site will initially serve as a marketplace for customized third-party content--including personalized news, travel information, and job market opportunities.

However, the new strategy has confused many in the analyst community. Some have questioned how a software maker is going to benefit from building a portal site. Many wonder how the firm plans to drive revenue with the new strategy. But SAP has argued its Internet strategy encompasses much more than its portal, and includes other products and services like business-to-business procurement and Web-based application hosting.

"Without a doubt, further ventures of are going to be top billing at Sapphire," said Joshua Greenbaum, head of Enterprise Applications Consulting in Berkeley, California. "It's absolutely imperative that SAP finds methods to define this portal as a strategic product."

ERP companies have pushed for years the idea of Net-friendly applications that work with back-office business software to automate accounting, human resources, and light manufacturing needs. But actual product delivery has lagged. PeopleSoft, for example, isn't shipping tools that will provide the infrastructure for its Web applications until the end of the year, and anticipates a delay of its Web applications until the first half of next year.

Jim Shepherd, an industry analyst at Boston-based AMR Research, said SAP needs to use this forum as a way to explain the initiative to its users, the press, and the analyst community.

Shepherd said a major positioning effort by SAP is needed to prove to its customers and prospects that "SAP is an e-business, Internet-enabled operation."

"They haven't done an adequate job of explaining what this [mySAP.com93 is and how their customers will use it," he said.

SAP's competitor PeopleSoft has been moving in a similar Net direction. During its recent user show, the firm introduced PeopleSoft 8 to its customers and outlined the company's Internet plan.

More announcements
SAP is also planning to make further announcements in the applications service provider (ASP) arena. ASPs host business applications for customers at data centers separate from the main business. Firms argue that hosting is an easier, cheaper route for small or mid-sized businesses that want to take advantage of ERP software.

SAP systems integrator Nexus partnered this week with Exodus, which runs data centers, to host SAP's applications. In the deal, Nexus would integrate and manage software for a customer, and Exodus would host the customers' hardware at a data center.

To date, SAP has named Qwest Communications International, services giant EDS, and start-up eOnline as ASP partners.

While SAP has no intention of hosting applications itself, PeopleSoft recently said it plans to do so in the future. What remains to be seen is how that will impact those ASPs with whom PeopleSoft already partners--including USinternetworking and Corio.