Plattner launched an ambitious plan for his $3.6 billion firm to
develop, within three years, front office and supply chain applications
that can compete head on with niche market products that have been on the
market for years.
While the back office applications, SAP's core R/3 system of financial,
human resource management, and manufacturing management applications have
reached that status, SAP only began exploring the other markets in the
past 18 months. But Plattner said he is confident SAP developers can have
to market by 2002, supply chain applications that are as good if not
better than current offerings from i2
technologies in Irving, Texas, or Manugistics in Rockville, Maryland,
and sales force, marketing, and customer service applications that will
give Vantive, Scopus, or SAP competitor Baan's recently acquired Aurum a
run for their money.
Bruce Richardson, analyst for AMR
Research in Boston, said SAP is hoping to make its so-called New
Dimension software products, those that are outside the scope of R/3, 30
percent of SAP's revenue in the next few years.
"That's billions of dollars," Richardson said. "The thing is they have
to find revenue somewhere for new growth. Wall Street is talking 35
percent annual growth for SAP. That is huge and they have to find it
somewhere."
While Richardson and other analysts believe SAP can develop the
functionality in these applications in the given time frame, they are
skeptical SAP can sell the products as standalone offerings and not as
part of a larger R/3 sale.
"The sales channel is the big issue here," Richardson said. "They have
to set up an affiliate channel and that will be difficult to do,"
especially when existing channels are already specialized in selling
products from niche players like Vantive and Scopus and not willing to
give up those offerings.
But SAP can reach its growth goals without ever leaving home. With
17,000 sites worldwide already using some aspect of R/3, analyst Joshua
Greenbaum, of the Hurwitz Group in
Framingham, Massachusetts, said SAP has a huge market right in front of it
to make those numbers.
"SAP's real goal is to sell to this existing installed base," Greenbaum
said. "There is huge pent up demand that is going to grow the next couple
of years. The front office applications are going to piggy back on the
expansion of R/3. I don't see SAP selling its [front office] or [supply
chain] applications without R/3."
SAP announced today that it bought AMC
Development's call center technology to add to SAP's Focus product,
the mix of sales force, marketing, and customer service automation
applications.
"This acquisition and joint development adds a critical piece to the
SAP Focus initiative," said Heinz Roggenkemper, executive vice president,
SAP Labs. "The call center will enable enterprises to engage in a dynamic,
continuous dialogue with their customers, which will transform notions of
marketing, sales, and service through one-on-one business relationships."
Financial details of the purchase were not released.
In other news, Oracle Corporation announced a 64-bit version of its
Oracle8 database for R/3. It is meant to allow users to store terabytes of
R/3 related data in the database. It is currently available with
R/3Release 3.1 and 4.0 on Compaq/Digital Unix. By the end of 1998,it is
expected to be available for all Unix platforms.
