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SAP show to focus on e-business

At its user conference next week, the company plans to tout initiatives centered on high-profile software segments such as marketplaces, corporate portals and supply-chain automation.

It's showtime for SAP.

At Sapphire, its user conference which kicks off in Orlando, Fla., on Tuesday, the German software giant intends to tout initiatives centered on high-profile software segments such as marketplaces, corporate portals, customer relationship management and supply-chain automation. SAP will also spend time trumpeting momentum gained in these areas and demonstrating how customers are already using some of its latest Internet-based software.

Analysts are really looking for a strong message in these areas from SAP, which has been criticized for sending somewhat cryptic signals regarding its products and initiatives.

"Orlando will be setting the stage for the coming year for SAP," with a heavy emphasis on customers, said a company representative.

In particular, analysts will be tuning in for word of SAP's plans regarding e-commerce, in areas such as business-to-business transactions, known in the industry as B2B.

"What needs to take center stage at the show is what probably needed to take center stage at their show last year, and that is really the fact that they are a (business-to-business) player," said Gartner analyst Karen Peterson. "They need to reiterate the fact that they can provide enterprises with (business-to-business) infrastructure. They need to show their success in that area."

At last year's Sapphire, SAP signed a joint development deal with Commerce One, a move applauded by its customers and one that scored Wall Street's approval. The deal also helped boost SAP's lagging efforts in the business-to-business arena, in which rivals Oracle, Ariba and i2 Technologies had been gaining ground. Each company sells specialized software to create online marketplaces for businesses looking to drive down their purchasing costs by moving their supply chain online.

Although SAP spent time last year emphasizing its commitment to the Internet--making sure its software helps companies translate their business to the Web--and vowing to deliver a simpler message, there is still room for improvement in that department, Peterson said.

"Companies are still not sure SAP can get them to become e-businesses," added Peterson. "SAP needs (to deliver) a solid marketing message."

David Boulanger, an analyst with AMR Research, echoed that point.

"SAP needs to prove to their users not only that they understand the e-commerce arena and that they've moved out into that arena, but that they are actually leading it," said Boulanger. SAP needs to make its entire message "digestible," he added.

Like other software rivals such as Oracle and PeopleSoft, SAP has been focusing on promoting a suite of Net-based software--known in this case as my manages business activities including financials, purchasing and human resources.

The company, which has dual headquarters in Walldorf, Germany, and Newtown Square, Pa., also recently entered the corporate portals market. In April, SAP announced a deal with Yahoo to jointly develop and sell Web portals designed for use within businesses. A new subsidiary, SAP Portals, will develop the service in conjunction with its parent company and the Internet giant.

CRM of the crop
Overall, analysts are expecting SAP to make a huge splash next week in CRM (customer relationship management) and to give portals and business-to-business efforts top billing.

"They're definitely going to be pushing their CRM (software) strategy and really need to gain traction and legitimacy in CRM," said Joshua Greenbaum, an analyst who heads Enterprise Applications Consulting. "CRM is one area that SAP has to prove itself."

Just two months ago, SAP introduced the newest version of its array of applications for managing customer relationship--applications that handle a company's sales force, marketing efforts and customer service activities. Included in the new version are improved ways to access CRM data from several mobile devices.

At around the same time, SAP terminated its CRM reseller agreement with partner Nortel Networks. SAP signed the deal with Nortel last year to resell CRM software from Nortel's Clarify application unit. The move was thought to jump-start SAP's sluggish efforts to offer its customers CRM applications sooner. Some analysts have said the two companies ran into several snags in getting the different applications to work with each other.

AMR's Boulanger said that despite SAP's slow start in the CRM game, the company is finally gaining some momentum in the lucrative sector. He expects SAP to trot out some of its marquee clients at next week's show.

Analysts agree that while SAP is under pressure to deliver the goods--that is, actual customers--the company overall is in a much stronger position than it was a year ago.

"They're going to be reaffirming the position that it has been holding for a while (and that is) that SAP is a company that is delivering value, not the hype," said Greenbaum.