SAP aims to encourage smarter IT investment

Germany's SAP has set out its aims to help cash-strapped companies find ways of spending their IT budgets wisely.

Germany's SAP has set out its aims to help cash-strapped companies find ways of spending their IT budgets wisely.

"Today, enterprises spend about 10% of their IT budget on innovation, 30% on consolidation and 60% on operation," SAP chairman and chief executive officer Henning Kagermann told delegates at the Strategic IT Management conference in Neuss, Germany.

"We hope to change that to about 40% for innovation and a maximum 40% for operation over the next couple of years."

Kagermann said SAP's NetWeaver open integration platform, residing between computing infrastructure and business applications, will lead the company's drive to reduce software costs.

he adde that contrary to the claims of some critics, NetWeaver does not represent a new price model for SAP, but rather a move to introduce a new generation of technology designed to provide greater flexibility.

NetWeaver can link disparate applications and data sources, allowing companies to make use of their existing IT investments and personnel skills while exploiting the power of web services, according to Kagermann.

The system is interoperable with Microsoft's .net and IBM's WebSphere platforms, and allows users to provision web services that have been developed in Java.

Kagermann called Java a "growing force" in enterprise applications and a trend that SAP fully supports.

As for running enterprise applications from competitors such as PeopleSoft and Oracle on top of NetWeaver, Kagermann said such an option is possible but claimed that applications from SAP would run best.

Some analysts, including Forrester Research's Charles Homs, view NetWeaver as an attempt by SAP to establish a de facto standard operating system for enterprise applications, similar to Microsoft's Windows operating system for desktop PC systems and, to a lesser extent, servers.
 
To further help reduce new product development costs for SAP and integration costs for its customers,SAP has assigned several hundred engineers to a special program, called Vienna, to study which components in existing software products can be reused in new products.

Kagermann added that radio frequency identification systems will replace much of the work people are required to do today.

Earlier this month, SAP launched infrastructure software designed to help companies manage and communicate data captured by wireless RFID inventory tags.

John Blau writes for IDG News Service

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