AMR predicts merger of ERP apps and IT infrastructure to cut costs

Over the next two years businesses will merge enterprise applications with their IT infrastructure to create a single IT platform...

Over the next two years businesses will merge enterprise applications with their IT infrastructure to create a single IT platform to lower costs and simplify management, AMR Research has predicted.

The concept has been dubbed "applistructure" by the analyst firm, which has found that up to 80% of a user’s IT budget is spent maintaining a myriad of IT systems within the business.

Although standardising on a single platform is not a new idea, AMR said demand is being driven by web services, service oriented architectures and the need to reconfigure and reuse code.

Erik Keller, research fellow at AMR Research, said the merger of enterprise applications and infrastructure would reduce the number of technology platforms and suppliers a user has to manage. At the same time, such a strategy could offer users more flexible IT. "Cost savings and business flexibility are touted as the two major advantages of applistructure," said Keller.

The components may come from different companies but they are managed and guaranteed by a single supplier. The main suppliers will be IBM, Microsoft, Oracle and SAP, said AMR. These will aim to offer a single, standard infrastructure platform and thereby reduce IT costs, it said.

According to AMR, IBM’s strategy relies on Websphere and business process outsourcing. Microsoft uses Longhorn - the next version of Windows - and Project Green, its enterprise software initiative. Oracle gains an applistructure through its applications, infrastructure and database products. And SAP’s strategy is based on its ERP products, Netweaver and its Enterprise Service Architecture.

As well as the big four suppliers, open source may emerge as a player in this area, said Keller.

In selecting the right supplier, AMR said it would be hard for companies with a large investment in any of the big four to move to a more desirable platform. But it predicted that suppliers are likely to tempt new customers with quality guarantees and buying models that place risk on the supplier rather than on the buyer.

Benefits of an ‘applistructure’

  • It can continuously decrease the operational cost of information technology
  • It delivers secure and reliable service levels and permits upgrades and product enhancements on the fly
  • It permits fast and flexible reconfiguration of business processes
  • It allows different technology providers as well as custom/legacy code to plug and play seamlessly.

Source: AMR Research

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