Five-Year Plan Bears Fruit for SAP

You’d think that only countries have five-year economic plans, but business software maker SAP is right up there with them.

And with its large workforce of more than 51,000 employees in 50 countries, why not?

In 2005, SAP (NYSE: SAP) launched an ambitious five-year plan to double its market through joint innovation with its partners.

It has just announced the first results of its five-year plan, coming out of the SAP Co-Innovation Lab, located at its Palo Alto, Calif., campus.

One initiative is a disaster-recovery product developed with VMware (NYSE: VMW) and NetApp (NASDAQ: NTAP).

Parag Patel, VMware’s vice president of alliances, told that the companys’ combined product “gives you all the information and guidance on how to perform disaster recovery on SAP applications.”

This is an automated disaster-recovery system so, “if something happens to your primary SAP site, you can automatically recover your SAP applications at a secondary site.”

The application, which SAP plans to release later this year, incorporates VMware’s Site Recovery Manager (SRM), Patel said.

Another project is the joint creation of SAP, its Business Objects subsidiary and Deloitte Consulting.

It combines SAP’s solutions for governance, risk and compliance (GRC) and enterprise performance management (EPM) and the Business Objects business intelligence (BI) platform with guidelines from Deloitte.

GRC is becoming increasingly important in enterprises as they struggle to comply with various regulations such as the Sarbanes-Oxley Act and the credit card industry’s PCI-DSS standard.

Enterprise performance management is “the question of how well the company overall is doing against its business objectives,” Richard Probst, SAPs vice president of solution co-innovation, told

Although SAP is integrating its products with those from Business Objects, which it purchased in October for $6.78 billion, “customers don’t yet have a good sense of how to bring those products together in an end-to-end solution,” Probst said.

Deloitte is helping SAP show its customers how to put those applications together.

Other projects unveiled are a private online collaboration workspace, support for enterprise service-oriented architecture (SOA) management and real-time reporting for manufacturers.

Looking far ahead

In his autobiography, Made in Japan, Sony’s co-founder, the late Akio Morita, said that American companies are shortsighted because they plan for the next quarter, while Japanese companies plan for a hundred years ahead.

That time span makes SAP’s five-year plan seem reasonable.

The plan is based on three main approaches. One is to deliver more functionality and value to business users, and SAP acquired Business Objects in line with that.

The second is to deliver more value to small and medium-size businesses, and the company’s Business by Design initiative is one example. This is an on-demand enterprise project delivered in software as a solution, or SaaS, form.

Although pundits and Wall Street analysts panned Business by Design, it is currently ramping up with its first wave of customers, Probst said.

The third approach is the business process platform, which SAP has “been working away at for years and years with customers,” Probst said.

“These are significant strategic objectives, and it’s why we do things like acquiring Business Objects,” he said.

Maybe so. The acquisition of business intelligence (BI) software vendor Business Objects could impact that company’s relationship with IBM, which spans more than 10 years.

In 2006, IBM and Business Objects announced plans to jointly develop several BI-based software packages.

These included software for the retail, financial services, government, health care and life sciences markets delivered in SaaS mode.

Business Objects’ Center of Competency is in IBM’s (NYSE: IBM) Pacific Development Center in Burnaby, in the Canadian province of British Columbia.

So will SAP now develop SaaS applications with business objects? If it does, how will IBM take it? And what will happen to the Business Objects Center of Competency?

Look for more excitement coming down the line.

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