SAP Business Suite 7.0 Kills Usual Software Upgrade ProcessSAP Business Suite 7.0 Kills Usual Software Upgrade Process
With the more harmonious approach to software application updates, SAP has its own story to tell against Oracle's upcoming Fusion application suite.
SAP on Wednesday announced Business Suite 7, which represents a new way of software deployment more than a features upgrade. With the new approach, SAP said it's doing away with its conventional upgrade process for software applications.
Business Suite 7 represents the most current versions of SAP's business applications, including those for managing supply chains, product life cycles, and customer relations, among others. Once upgraded, customers won't have to do a full upgrade for five years.
Instead, SAP is syncing all of its improvements to its applications so that they'll all be available at the same time. Customers will then be able to pick and choose from this "enhancement package" as little or as much as they want, according to SAP.
The suite announcement also includes "Value Scenarios," or industry-specific software modules SAP is developing to help companies analyze a specific issue, such as the shopping experience in the retail industry, by viewing data across applications, or implement a business process across applications, such as collaborative engineering, in the manufacturing industry. This approach uses dashboard and other technologies incorporated from SAP's Business Objects acquisition.
Late last year, SAP announced Best Run Now, a new software and SAP services offering designed to help companies install software to achieve a specific business goal, such as cash-flow improvement, within 90 days.
Collectively, these offerings and the switch from upgrades to enhancement packages are intended to help customers cut IT costs and resource requirements, while also improving business flexibility and insight during these tough economic times, said CEO Leo Apotheker in a press conference this morning.
A customer that upgrades to Business Suite 7, for example, won't have to do a full resource-intensive upgrade to SCM one month and a full upgrade to CRM several months later. Instead, that customer can choose only the enhancements it wants for SCM and CRM from a single enhancement package. The first package is due later this year.
"It is the next chapter of our success story," Apotheker said. "It's a keystone we will build on for the future."
It also gives SAP a story of its own as its top competitor, Oracle, continues work on its common-platform suite of Fusion applications.
For SAP customers, the move to upgraded apps, and onto the Business Suite 7 platform, is covered under customers' current maintenance contracts.
While SAP executives portrayed the move as a purely altruistic one, intended to help customers through the tough economy, there are also ways the approach could boost revenue.
For one, it could encourage companies still on ERP R/3 to make the upgrade to ERP 6.0, which already uses the enhancement approach and is compatible with Business Suite 7, while R/3 isn't.
And with synced application improvements offered in one enhancement package, SAP is taking a more harmonious approach to its application business. SAP can bring this vision to new customers and sees Business Suite 7.0 as upstaging Oracle Fusion.
With the new approach, the biggest investment in customer time and possibly money would be the upgrade to Business Suite 7.0. "It's about getting on the train, and getting that train in motion," explained executive VP Peter Graf.
"Customers can get on that train at any point in time. But once they're on that train, they won't consume upgrades; they'll just consume enhancement packages." Graf likened it to being able to check off a list of functionalities when the enhancement package becomes available.
But it may not be that easy. Stuart Williams, an analyst with Technology Business Research, notes that many customers have modified their SAP apps, and it's unclear how they'll be able to reuse or reapply those modifications if they jump on that train.
"Keeping it simple may help SAP, but partners and customers will have to evaluate the cost of making the modifications or the opportunity cost of adopting the unmodified SAP code in the name of efficiency," Johnston said. "For new deployments, Business Suite 7 provides a clear lower-cost route to value then previous versions of SAP applications."
Longtime SAP customer Ed Tobin, senior VP of global IT at Colgate-Palmolive, applauded the development. "This will allow us to use less of our resources on upgrades, and more on new capabilities for business purposes," Tobin said. He also sees Business Suite 7 as providing better access to the Business Objects technologies and letting Colgate "get better access to a lot of information we have."
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