In-Depth

SAP development strategies: NetWeaver this way comes

No company has come to better represent the idea of enterprise applications than SAP AG headquartered in Walldorf, Germany. Today, more than 20,000 companies run more than 64,500 installations of SAP software for their back-office infrastructure. The lion's share of those installations are SAP's R/2 and R/3 ERP systems. When big companies talk about integrating applications today, there is usually an SAP application in there somewhere.

When client/server computing began to flourish in the 1990s, and international organizations looked for financial software suites, SAP successfully moved its former mainframe application software forward. Like others, the firm has had to make adjustments since then -- supporting a number of databases, finding better ways to link to legacy computer systems, linking up with Java servers and embracing so-called Web services architectures.

While SAP applications have long been known for being mission-critical, they are also known for being rigid, complex and tightly coupled. So notoriously proprietary was the company's software, and so arcane its ABAP programming language, that a cottage industry of consultants sprang up to customize, fine-tune and upgrade SAP applications.

While overall company revenue has risen from euro 5.1B in 1999 to euro 7.0B in 2003, software license revenue declined in 2003. The drop was somewhat offset by increases in maintenance revenue, yet the mantra in the IT world today calls for reduced maintenance charges. Like others, SAP is working to create more flexible software and to exploit open-source and XML-based Web services software to make that happen. At the same time, the company hopes to shed its inflexible software image, and to expand into the small- to medium-sized business (SMB) markets.

Opening the door
The company's recent release of its NetWeaver services software has roots in a multiyear effort to open up its platform and to build a wider SAP developer community. It was in 2001, suggested an SAP representative, that the company decided to open up. "There was little awareness in the developer community around SAP technology," admitted Karl Kessler, product manager, SAP NetWeaver Foundation. "Our technology was a little too proprietary." So SAP bought a J2EE-compliance application server and integrated it into its technology portfolio.

In January 2003, SAP introduced its NetWeaver integration platform architecture. NetWeaver, an open standards platform based on a J2EE engine, applies loosely coupled XML and Web services standards to the problem of connecting SAP applications with those of other software companies.

SAP views NetWeaver as both a set of development tools and a package of integration technologies. Prior to NetWeaver, other SAP tools and middleware were required if users wanted to access core R/3 processes, build portals or enable mobile devices, said industry analyst Tony Baer, principal at onStrategies, New York City, and an ADT contributing editor.

As described by Baer in a recent issue of his onStrategies Perspectives newsletter, SAP's efforts to simplify its programming model can be traced to its Business APIs (BAPIs) of the 1990s. These were seen as useful pre-defined paths to SAP's data and process models. But, wrote Baer, the need for Web enablement and business intelligence emerged, so SAP introduced the mySAP.com Web infrastructure.

Now, with enterprise integration on everyone's mind, comes NetWeaver's Services-Oriented Architecture (SOA) for building "composite applications."

Oh what a Net we weave ...
SAP has integrated NetWeaver with most of its platform components: SAP Web Application Server, SAP Composite Application Framework, SAP Master Data Management, SAP Enterprise Portal, SAP Exchange Infrastructure, SAP Business Intelligence, SAP Solution Manager and SAP Mobile Infrastructure.

"The amount of development effort needed to interface SAP systems to other things has gone down because now SAP is giving that to us pre-configured in SAP XI [Exchange Infrastructure]," said Bill Grasham, a principal at Deloitte Consulting, an SAP Services partner. "A lot of the BAPIs are supported. You're basically getting half your integration with the software; it simplifies what you have to do from a middleware perspective."

NetWeaver signals a vast change at SAP; rather than just allowing developers to create a collection of disparate applications, the company now provides a platform that is easier to integrate to and to build new types of applications from. In addition, NetWeaver is vendor-neutral, allowing a customer to run NetWeaver alongside IBM WebSphere or BEA WebLogic if they want to. But perhaps most revolutionary for SAP, it is a platform for addressing the integration issues of non-SAP shops as well as SAP developers.

But the biggest change was yet to come. At its TechEd '03 Conference last September, SAP launched the SAP Developer Network (SDN), a portal that provides tools, services and a place for SAP developers to interact with one another, as well as with SAP technical staff and customers. By providing integrated tools and Web-to-legacy deployment technologies to Java and .NET developers, the firm has now made it easier for non-SAP developers to build enterprise-class Web services that can be integrated with SAP back-end legacy systems. In short, SAP has extended the reach of its development environment beyond its enterprise applications.

The SDN site is a single-stop source for information about the NetWeaver platform. Before the creation of the portal, getting technical details out of SAP was often a Herculean task, admitted one SAP executive. But with the creation of the portal, "we've bulldozed the walls around SAP, and the knowledge you need as a developer is not packed away in an SAP cubicle somewhere," said Jeff Word, director of tech strategies for NetWeaver and xApps.

Esat Sezer, CIO at appliance manufacturer Whirlpool Corp., said that over the years, and through organic growth and acquisition, Whirlpool has created "quite a diverse platform of processes." In NetWeaver, he sees a means of saving on integration and a way to allow "re-investing in innovation. Without requesting additional investment from our brand 'P&Ls,' we can [use] NetWeaver to create enough resources to invest in new capabilities." Sezer admitted, however, that Whirlpool is still in the early stages of NetWeaver adoption.

Developer relations
Today, establishing a developer community is a basic step in the adoption of any architecture or platform. It allows easy access to the latest technologies, tools and resources, enabling developers to quickly create new applications. Other producers of software platforms, such as Sun Microsystems and BEA, are also looking to attract independent software developers by opening up their code. In so doing they are trying to emulate the success Microsoft had in nurturing a developer community, which helped spur the popularity of the Visual Studio application development platform.

SAP built the SDN internally, using its own NetWeaver technologies. "Doing it this way cost us some more money and took a little more time, but it was worth it," said the firm's Word. "It's the best demo we'll ever have for our tools. And by taking the best technical resources from our NetWeaver development team and putting them on SDN, we're pushing the product to the limit of what it can do. It's a great test bed for us."

SAP estimates that there are 1 million registered ABAP developers and, according to Word, the goal is to eventually have all of them become potential developers for NetWeaver. But while every ABAP developer may be working with NetWeaver at some point, "they won't be forced to be Java guys," Word said. "They also won't need to spend as much time on integration issues between ABAP and Java because NetWeaver manages a good portion of what they used to do by hand. This means they'll be able to spend time on higher-level ABAP things."

In the more than 80% of Fortune 1000 companies that have some SAP software, everything comes in and goes out of SAP. Because Java has found a mid-tier home, this has caused some problems. Among the biggest challenges for a Java programmer is connecting a Java app to SAP.

Working or connecting with R/3 data has traditionally been a task left to costly system integrators or specially trained SAP developers who use ABAP. "For non-SAP developers, we want to be a nirvana of integration tools, so that they can stitch something together and write it natively inside an SAP application," explained Word. "If we can offer these developers tools that they're familiar with, that will eliminate the major pain point of integrating with SAP."

At the SDN portal, developers can discuss and learn more about products such as NetWeaver Development Studio, Web Dynpro and Java Connectivity Builder. Like Java tools specialists such as Borland, BEA, Sun and IBM, SAP's goal now is to create tools that mere mortals -- not just Java jockeys -- can readily use.

xApps on tap
If NetWeaver takes off, a change is in order for the SAP R/3 after-market. SAP strategists hope to get developers to design, certify and market NetWeaver applications that have back-end integration with a NetWeaver component and also enhance the platform's functionality. SAP terms these "composite applications" or xApps. To be built by SAP as well as its partners, they will use pieces of existing SAP applications to build out new functionality, or extensions, to the SAP family of products.

SAP's Word describes xApps as "somewhat parasitic" because they must live on top of other applications. A company running R/3, PeopleSoft HR and Microsoft Project might want each of these applications to talk to each other to share budgeting and financial resources. But even though the information is there, you cannot get at it because the applications are not tied together. As Word puts it, "You have 80% of the functionality you need in these underlying systems, but you're missing the other 20% and the integration. So you'd use the integration tools in NetWeaver to tie these systems together to present all the data you need in one enterprise portal. You could use any language you want -- Java., .NET, ABAP -- to fill out the other 20% of the functionality. At the end of the day, you'd have one big box that has everything in it, but you only had to build that 20%."

xApps represent the trend toward supporting multiple business processes across multiple silos from different vendors or one vendor. "Something like this is easier to do with standards and even easier if you can provide templates for core business processes," said Dwight Davis, the Seattle-based vice president and practice director at Summit Strategies, an IT consulting firm headquartered in Boston. "SAP was on the ball in identifying this need to provide some of the plumbing to tie some of these processes together at the infrastructure level, rather than moving up into the pure application level to support these core business processes," he said.

Although he questions how fast SAP can move NetWeaver forward, Eric Austvold, research director at AMR Research, a Boston-based consulting firm that specializes in analysis of the enterprise software market, sees much favor in NetWeaver. "It's a win for the third-party organization that has written the xApp and can sell it back to the SAP customer base, as well as a win for the customer, since they get to use a common platform and common technology," he noted. "It's a very compelling story if they can pull this off."

Can they? Deloitte's Grasham said that after some initial doubts about the reusability of these applications, the consulting firm is now actively involved in selling and implementing them. He said Deloitte is in the process of "putting together a business case for building one internally," and was likely to have one written by year's end.

Kessler at SAP said that xApps will lead to a changing role for consultants such as those at Deloitte and Accenture. "Now, instead of tweaking buttons on SAP and putting applications on top of SAP, these people will be getting under the hood of SAP and doing what they want to do."

Web services
Making Web services technologies work together seamlessly has proven to be a bigger challenge than many expected. But now that Web services technology and associated standards, such as Java and XML, have taken the lead in the race to provide what enterprises need to integrate disparate applications, Web services integration is one of the top user priorities in 2004.

"Web services are not a magic bullet that eliminates the need for system integration, just the bottom end of the integration stack," said Summit Strategies' Davis. "There's still a lot of work to do on top of Web services to integrate modules -- an incremental step to lessen the cost of integration."

For an ISV to support Web services, the simplest way to do so is to take some existing code or module, and to then wrapper it to exploit the API. Underneath the wrapper, however, is custom code that allows the module to interoperate internally with the vendor's own components but less so with those from other vendors. A more committed way to support Web services is to redesign the code itself so that it is truly a Web service.

So while Web services keep chipping away at the cost and complexity of interfacing products from different vendors, it also raises the spectre of vendors losing some of their advantage of locking in their customer base, noted Davis. As he puts it, "for a primarily SAP shop to plug in a PeopleSoft HR module, well, the disincentive isn't as significant as it once was."

While other vendors of enterprise software, such as Microsoft with .NET and Siebel with UAN, have rushed in with their own flavors of integration strategies based on Web services, SAP has been among the most aggressive of the enterprise ISVs in moving to support -- and influence -- Web services standards.

That aggressiveness also applies to SAP developers. "All of our developers are thinking about how they can turn things into an enterprise service," said SAP's Word. He defines enterprise service as an industrial-strength Web service, and describes the difference as follows: "If you want to create a Web service to cancel an order, that's easy to do. But if you want to make that an enterprise service -- one that doesn't just erase a field in a database but also notes the difference in inventory, reduces the salesman's commission and amends the purchase order to the supplier -- it needs to be taken a couple of layers higher," he explained. "Our Application Architecture Group is using NetWeaver to Web service SAP solutions. We have thousands of people looking at wrapping that into enterprise service, so that a credit check is a Web service instead of a hard-coded function call. That's a massive undertaking."

Going forward, enterprise ISVs will no longer be able to think of their products as islands unto themselves, or even as products or suites that can use adapters to link easily to other popular applications in a point-to-point fashion. Rather their applications -- and, potentially, components of their applications -- will need to use Web services to snap into SOAs to play whatever role they can in supporting cross-functional business processes.

So has NetWeaver redefined SAP? "It's more accurate to say that SAP anticipates that NetWeaver will redefine the company. But it hasn't happened yet. It's fair to say that their number one priority is to promote the use of NetWeaver on a global scale," said AMR Research's Austvold. "But only a handful of customers -- perhaps 100 -- have put some portion of NetWeaver into play. Since they have some 24,000 companies, this gives you an idea of how early a stage we're at."

In fact, among SAP's stated goals for 2004 is to grow software sales, position mySAP WRP as a clear improvement on SAP R/#, and to gain as many SAP NetWeaver reference customers as possible.

But more is needed, according to onStrategies' Baer, who would like to see SAP take matters a step further. "Today, mySAP and NetWeaver remain separate," wrote Baer in his onStrategies Perspectives newsletter. "Maybe that makes sense for customers that simply want Web access without the integration or portal. But in the long run, that's an artificial separation."

How the SAP third-party market reacts to all this is also of key importance. SAP systems have long been a target for a slew of integration software specialists. NetWeaver may be SAP's most important move to date to ensure that it is not left out of the integration party. And while IBM and Microsoft were quick to announce support for NetWeaver, each firm still has its own connectors to offer the application development manager charged with integrating SAP into the latest corporate technology fabric.

Please see the following related story: "IBM adds shortcut to SAP NetWeaver" by Peter Bochner

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