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SAP challenging Windows

Though they have a tightly knit relationship when it comes to the application server and database, SAP and Microsoft appear to be parting ways on the desktop.

Kim Girard
Kim Girard has written about business and technology for more than a decade, as an editor at CNET News.com, senior writer at Business 2.0 magazine and online writer at Red Herring. As a freelancer, she's written for publications including Fast Company, CIO and Berkeley's Haas School of Business. She also assisted Business Week's Peter Burrows with his 2003 book Backfire, which covered the travails of controversial Hewlett-Packard CEO Carly Fiorina. An avid cook, she's blogged about the joy of cheap wine and thinks about food most days in ways some find obsessive.
Kim Girard
3 min read
Are two software titans--SAP and Microsoft--about to part ways on the desktop?

Though they have a tightly knit relationship when it comes to the application server and database, the companies appear to be splitting up on the desktop, a Microsoft sacred cow that brought the company a whopping $4.7 billion in 1998. The problem? SAP needs access to the desktop, too, in order to expand its enterprise user base and make more money.

Enter EnjoySAP, the company's new platform-independent portal-style interface, designed to make its core application, R/3, easier to use. Using an SAP, Oracle, or PeopleSoft-controlled portal, employees will soon be able to access the Internet, get email, download information about the competition, check on product delivery status, or do report distribution--all without ever using Windows.

With its new interface and accompanying applications, SAP estimates it can reach 10 million users within the next three years, targeting them with new self-service and e-business applications, as well as its New Dimension line for the front office. If it succeeds, SAP could threaten Microsoft's desktop dominance with, for example, its core Outlook email and calendar management product, according to Boston-based AMR Research.

"Microsoft's ability to add applications now is seriously hampered," said AMR analyst Dave Caruso. "[Microsoft] Office won't be hurt, but as applications like R/3 start getting more Outlook-like?Outlook will be more exposed."

SAP developed its new interface independent of Microsoft--placing an emphasis on making the design look nothing like Windows. EnjoySAP, unveiled yesterday at SAP's labs in Palo Alto, California, can be used with any version of SAP's core product, R/3, which automates firms' financial, human resource, and manufacturing applications.

The company wants EnjoySAP to serve as a portal for as many corporate users as possible. It is the firm's way to reach beyond the typical 10 to 15 percent of employees within organizations who now use their ERP (enterprise resource planning) software.

About 95 percent of SAP R/3 users are also Office users, and applications available now enable R/3 users to easily tap into Microsoft Excel, for example, and use it with SAP applications in real-time.

SAP didn't need to reinvent the wheel with its new EnjoySAP interface, some observers said. But other analysts said the firm had little choice but to build a new interface, in order to shore up a weak link in the firm's strategy.

"It's not just a pretty face," said Joshua Greenbaum, analyst with Enterprise Applications Consulting in Berkeley, California.

"These two companies have been on the collision course for a long time--particularly with the infrastructure [issue]," he added. "I think SAP clearly would like to play the market as carefully as possible--maintaining its own technical dominance while cooperating as much as possible with Microsoft. [But] Those two goals tend to be contradictory."

"Here, the economics of growth for SAP become very real," said Thomas Curran, CEO and founder of Component Software, an application development firm in Cambridge, Massachusetts. "They'll have to encroach on each other. It's not a great, big, rosy relationship."

"The question is," he continued, "If Microsoft is committed to owning 99 percent of desktop computing, how does their relationship with SAP pan out at the desktop level? Will SAP be a Microsoft ally? Will they have sole support for Explorer?"