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SAP Finally Opens NetWeaver to Developers

It doesn't require a whole lot of critical analysis to figure out exactly what SAP bigwigs are thinking these days, why the company's making the moves it has during the past few months, or where it sees the industry heading.

A more important question has arisen from this week's TechEd '07 conference in Las Vegas, however: Why did it take SAP so long to finally open up its cornerstone NetWeaver platform to developers?

On Tuesday, the company delivered on its promise to the developer community, announcing that for the first time since NetWeaver's debut in 2003, developers can now buy a special annual license for the platform directly from its Web site.

While the news means the start of a new and substantially discounted subscription-based model, developers and industry watchers -- and surely most of SAP's 41,000-plus customers -- are likely to be thinking more about the long wait.

"Timing is everything in life," Denis Pombriant, an analyst at Beagle Research Group, said in an interview with InternetNews.com. "This is the kind of thing they should have done a couple years ago. Perhaps it reflects some new enlightened or advanced thinking in the management suite. Either way, it's good that they've reached this point."

While there are no more sales reps to deal with as a result of the news, developers will still have to fork over $2,300 for the privilege and must be members of the SAP Developer Network (SDN). According to analysts, that fee buys developers a one-year, full-access pass for roughly one-third to one-fifth of what SAP typically charges its customers for a full NetWeaver license.

A bargain, perhaps, but it's still considerably more expensive -- in some cases as much as six times the price -- than competitors such as IBM and Sun Microsystems are charging developers to tinker with their software and tools.

SAP said the one-year license for "internal development and evaluation purposes" will include all the requisite bells and whistles. Through the deal, developers receive the NetWeaver Master Business Intelligence, Master Data Management, Mobile and Portal components. They also get its Web Dynopro and NetWeaver Composition Environment, which gives them drag-and-drop user interface tools for applications based on either Java or ABAP programming languages.

SAP is also throwing free software patches and upgrades into the deal, as well as a virtual catalog of the more than 1,000 hours of technical sessions held throughout the weeklong TechEd show.

Eligible developers must be based in the U.S. and Germany, as well, at least for now.

The apparent change of heart and strategy comes less than a month after SAP unveiled its first software-as-a-service (SaaS)  offering, Business By Design, to less-than-spectacular reviews from industry and Wall Street analysts.

As more enterprise and small- to mid-sized businesses (SMB) continue to embrace the on-demand software model, and companies like Salesforce.com raise the bar by offering on-demand application development platforms, the pressure is on SAP. As a result, it's being driven to create its own environment where developers can build mashup applications, widgets and other Web 2.0 tools in connection with its business applications.

"The table stakes are bigger now than a few years ago," Pombriant said. "SAP now understands it has to have an on-demand strategy and a developer plan to be long-term players. SAP has been and maybe still is perceived as a bit closed and hard to work with."

What's ironic and perhaps most telling about SAP's belated appeal to potential NetWeaver developers is the fact that it created the SAP Developer Network four years ago, right around the time NetWeaver was first introduced.

Mark Yolton, vice president of SAP's Community Network, told InternetNews.com that the SDN now has more than 900,000 developers and business process experts, and that SAP has established an internal goal of growing that figure to more than 1.5 million members by the end of 2008.

"The SDN subscriptions program heralds the next generation in co-innovation across the extended SAP ecosystem," Zia Yusuf, executive vice president of SAP's global ecosystem and platform group, said in a statement announcing the new developer program. "This is one more way that SAP is meeting the growing demand for SAP NetWeaver from individuals and organizations of all sizes."

Earlier this year, SAP CEO Henning Kagermann said the company expects to grow its total customer base from roughly 41,000 to more than 100,000 by 2010. Much of that growth will be tied to the SMB market, he said.

Realizing those ambitious goals could hinge on just how well this new NetWeaver licensing model is received by a developer community that had been, until Tuesday, denied access to SAP's most important product.