News Analysis

Remodelling ERP for an agile future

John Rymer

Oracle and SAP will embrace service oriented architecture in their next-generation products, but the companies are taking different approaches.

As enterprises demand greater agility in applications software to meet changing business needs, suppliers of enterprise software are increasingly embracing service oriented architecture and business process management. The result will be enterprise applications unlike any seen previously.

The two largest providers of enterprise applications are pursuing different paths to their next generation products, giving prospective users a real choice. The differences are stark. Oracle will continue to build through acquisition SAP will rely more on internal development and partnerships.

SAP promises to release its next-generation business application suite in 2007, Oracle in 2008. The two competitors will focus on master data management, analytics and repository architectures. SAP has stronger market momentum, better articulated value for next-generation applications, and a better partnership strategy than Oracle.

But Oracle's strong middleware platform and greater support of standards make it a better choice than SAP for firms that will rely on custom development as well as packaged products.

Earlier this year, Oracle president Charles Phillips and key executives provided a progress report on Project Fusion, Oracle's next generation of enterprise applications.

Phillips' presentation demonstrated that Oracle has made progress in assembling a foundation for the new applications suite and provided more details on the functional rationalisation of Oracle's existing application suites (see box).

Oracle also reaffirmed its commitment to deliver its first set of Oracle Fusion applications in 2008, but the company still has much hard work to do to meet its schedule.

Oracle has also discussed how it will integrate its latest large acquisition, Siebel Systems, but has not yet described exactly how it will incorporate Siebel's customer relationship management functionality into Fusion applications.

Assuming that Oracle releases the first Fusion applications in 2008, significant adoption and reference implementations are unlikely before 2010.

This lag will be the result of the time needed for product hardening and large-scale roll-outs customary for any new generation of applications.

Peter Zencke, president of SAP's research and innovation division, revealed details about Business Process Platform, SAP's next-generation application platform (an evolution of Netweaver), and the technical plan for the 2007 release of MySAP Business Suite (MySAP 2007) at the company's analyst conference in December 2005.

SAP is positioning MySAP 2007 as its first fully service-enabled software release, using SAP's Enterprise Service Architecture. SAP published a timeline for MySAP 2007 three years ago and says it is on schedule.

In the meantime, SAP will build billing engines, electronic payments management, and other new applications separately under its xApps brand and eventually move those to Business Process Platform as well.

Assuming that SAP keeps its promise to ship MySAP 2007 on time, SAP is likely to need 12 to 24 months in the field before MySAP 2007 is demonstrably rock solid and enterprise-ready. This means that significant adoption and enterprise performance cases are likely in 2009.

Where to start with service oriented architecture

Forrester Research recommends businesses gearing up for service oriented architecture focus initially on data hubs, portals, service development, integrated analytics, business activity monitoring and Business Process Execution Language (BPel). These are the major technologies and techniques used in Oracle's Fusion Applications and MySAP 2007.

Select the "entry point" to SOA that is most important to your business, as opposed to trying to master all elements at once, said Forrester.

Build an initial application to start the learning. Each of these technologies has applicability to current applications and can be used to supplement them - for example, by building a composite application using existing applications.

It is important to acquire enough Oracle Fusion middleware and SAP Netweaver to start learning. If you are an Oracle applications user and do not have licences for Oracle Application Server and BPel Process Manager, get them.

These products are available at a low licence cost relative to competitive alternatives and contain the key new technologies on which Fusion applications will be based.

If you are an SAP applications user, start gaining experience by acquiring the SAP Web Application Server, Portal Server, and Exchange Infrastructure SAP has low-cost trial offers to reduce the financial risk of initial exploration.

Along with these options, you should take the opportunity to evaluate the other options available to you in plotting your course to SOA-based applications. You have "buy" and "build" alternatives.

IBM and Microsoft are the largest alternatives to Oracle and SAP, but many smaller providers also have products and offerings worthy of consideration if you decide that either custom development or a specialised industry package is your best course, said Forrester.

John Rymer is vice-president and research analyst at Forrester Research, specialising in application servers and platforms. This article is taken from his paper "Oracle Versus SAP In Enterprise Applications: Let The Battle Of Architectures Begin!"

 


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