Accenture, Cap Gemini Ernst & Young, Bearing Point and IBM are releasing a slew of xApp-based technologies this year. However, IT executives and industry observers have questioned SAP's ability to define how its new cross-functional business processes will operate in heterogeneous environments.
As competitors such as PeopleSoft, Oracle and JD Edwards use similar standards-based Web services technologies to extend their own application suites, critics have claimed xApps technology is more vision than reality and requires too much customisation.
SAP countered that xApps have strong momentum in the market. The first xApp developed organically by SAP - resource and project management - shipped in December and has garnered two customers so far.
"xApps makes sense of what Web services are all about - drawing data out of an existing landscape of systems and composing them," said Tim Bussiek, SAP's director of xApps marketing strategy.
"You can install quickly, [and] it can be supported over time. If you want to build a good software application, you need a close tie-in with the underlying technology foundation. The xApps are really for mature companies that already have systems - they extend those."
The xApps architecture requires SAP to shift from its traditional position as a pure enterprise applications company to one that embraces best-of-breed solutions.
Greg Cudahy, who heads the global supply chain practice at Cap Gemini Ernst & Young, has been working with SAP to market xApps to early adopters who can serve as "victory flags" for each of SAP's xApps.
Customers are asking for the business case to be defined, and questioning whether Version 1.0 of the xApps will really solve their particular problem, Cudahy said.
If successful, the new xApps strategy would allow SAP to tap the growing market for applications that reside on the edges of the enterprise - to reach a customer or pull data from a supplier.
Although this market can offer growth rates at more than 20% - much higher than the 12% for core applications such as general ledger and human resources - it also is the stronghold of best-of-breed companies, said Yankee Group analyst Jon Derome.
"That's a tough place to sell a packaged application because that is where everyone makes their competitive distinction known," Derome said. "That's typically a unique set of capabilities. That doesn't work real well in SAP's world."