Commentary: SAP move a plus

The company's announcement that it plans to reabsorb its U.S.-based Internet subsidiary is good news for most of its customers.

2 min read
By Gene Phifer and Derek Prior, Gartner analysts

SAP's announcement that it plans to reabsorb its U.S.-based Internet subsidiary is good news for most of its customers. It reduces the complexity of integration technologies across the broad SAP product line, removes sales channel conflicts and extends SAP's standard support processes across these newer products.

See news story:
SAP to bring Net unit back in-house
However, for customers and partners that subscribed to the vision of SAP Portals, the move will likely make it harder to sell to the non-SAP customer base.

When SAP acquired Top Tier Software and created SAP Portals a year ago, Gartner highlighted the risk that SAP would exert undue influence over the portal unit's direction. This influence was present during the past year, but it wasn't stifling or obtrusive. However, now that SAP Portals is an operating division of the parent company, it will have to focus more on the broader needs of SAP, possibly to the detriment of its original goal of independence.

Nevertheless, Gartner believes this consolidation was inevitable. Two years ago, SAP Markets was launched to exploit exchange technology. One year later, SAP Portals was formed to exploit portal technology. Both areas, however, have rapidly matured from pure technology efforts into application-driven opportunities. These smaller technology-driven subsidiaries were free to evolve more rapidly than they could within SAP.

That kind of development was critical for SAP, which could not afford to be late to Internet opportunities twice. Enterprise Portal 5.0 has already evolved to offer collaborative application content for interactive user integration. Business Packages offers business content for internal users (employees, managers and directors) as well as external users (customers, suppliers and partners), based on information and experience derived from SAP's application portfolio.

Shai Agassi, who led the subsidiary, will head the new group within SAP. His promotion to director promises a reinvigoration of the entrepreneurial spirit within the SAP board. Agassi will likely target the non-SAP market, but in a smaller way.

SAP customers should continue business as usual but pay close attention to the future development of this new business unit. Much of the company's future software functions will likely be delivered by it. Non-SAP customers should view this announcement as a possible step back in the proprietary direction, rather than further down the open-systems road.

(For a related commentary on SAP, see gartner.com.)

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