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Microsoft, SAP Sing Praises of 'Duet'

UPDATED: Microsoft and SAP today introduced Duet, a product the two companies developed jointly to allow users to interact with SAP enterprise software through a Microsoft Office interface.

Duet software for Microsoft Office and SAP, formerly code-named Mendocino, will launch in June 2006.

The first release will allow users to access features of SAP enterprise applications such as budget monitoring, time management, leave management, and organization management, all through Microsoft Outlook.

Other features of SAP software will be made available through Outlook in two other releases scheduled for later this year.

The idea is that since more people are familiar with Outlook than with SAP, Duet will enable companies to add more users to SAP products.

"We're looking at the number of employees versus the number of users of SAP," said Shai Agassi, president of the product and technology group at SAP, during a conference call this afternoon. "The Microsoft presence is close to the number of employees." The time management feature, for instance, will enable employees to record work and billable hours using Microsoft Outlook calendar, and to automatically synchronize and update appointments in Outlook with the mySAP enterprise application.

Duet uses XAML to pull information from SAP back-end data into Microsoft Office applications.

This should help SAP gain incremental revenue from selling additional licenses in companies where it is already present. Microsoft gets to share in enterprise dollars where it would otherwise be unlikely to unseat SAP.

According to Jeff Raikes, president of Microsoft's business division, this scenario is already playing out among customers who began testing Duet in December 2005.

He said that Atmel, a $2 billion chip maker based in Silicon Valley, expects to increase the number of employees using SAP from 10 percent of the workforce to 75 percent.

Sharada Achanta, senior director of solution marketing for emerging solutions at SAP, noted that SAP will be better able to improve its enterprise products by adding new users.

"These are not typical heavyweight SAP users," she told internetnews.com.

The interaction with these new types of users will give SAP new insights and "help us keep improving the product," she said.

Analysts looked at Duet with mixed reviews.

Joshua Greenbaum, principal analyst at Enterprise Applications Consulting, said Microsoft has already been pushing Outlook and the rest of the Office suite as the interface for its own Dynamics enterprise software products.

"This undercuts Microsoft's own strategy for its own enterprise software."

After all, Duet will be sold through different sales channels than Dynamics.

"This is a very touchy subject inside Microsoft," Greenbaum said.

Raikes disputed the notion that Duet may cannibalize sales of Microsoft's enterprise software.

"Duet is about mySAP and Office -- for the enterprise segment," he told internetnews.com. "It's not about the mid-market where Dynamics and other SAP product lines focus."

Rob Koplowitz, director in the Microsoft Office business applications group, added that channel partners have been excited to join the Duet chorus.

"The larger systems integrators tend to wait for products to be established," he told internetnews.com. "But [Duet] has elicited more enthusiasm ahead of general availability than I've ever seen."

However, Greenbaum also noted that Microsoft seemed to be wisely hedging its bets.

"It's better for Microsoft to own the desktop at an SAP customer than to have no presence whatsoever. They're unlikely to be able to switch SAP customers to Dynamics," he said.

Moreover, he said, Duet's functionality "exceeds what Microsoft is able to do on its own enterprise software."

That view certainly dovetails nicely with the message that Microsoft and SAP did their best to communicate: that it is all about the customer.

"Customers are getting the benefit of this great innovation," said Agassi.

One analyst saw Duet as am efficient tool for end users.

Mark Levitt, of research firm IDC, said Duet will improve the quality and speed of decision making and workforce productivity.

"With Duet, SAP will be easier to access and more relevant for many more users who spend their days in the Microsoft Office [environment]."

In the second half of 2006, SAP and Microsoft plan to offer two value packs for Duet, providing additional business scenario support, enhanced platform capabilities and language support.

These value packs will expose five additional scenarios in MS Office coming from mySAP ERP and mySAP Business Suite applications for customer relationship management (CRM) and supplier relationship management (SRM).

The scenarios are: recruitment management, travel management, analytics, purchasing management and sales activity management.

The companies said that Duet will go beyond self-service for employees and managers to enabling line-of-business operational efficiencies and cost savings.

The value packs are designed for compatibility with the next release of mySAP ERP and the 2007 release of Microsoft Office System, and will expand language support to include English, French, German, Portuguese, Spanish and Japanese.

Agassi said that future releases will involve supply chain and procurement management and other traditional enterprise planning solutions.

Raikes also said that Microsoft will release tools allowing third parties to develop their own scenarios and value packs, but would not say when that would occur.