SAP changes course - includes related articles on SAP AG's R/3 components, the IS view of the company's change of direction, and an interview with SAP Vice Chmn Hasso Plattner - Company Business and Marketing - Cover Story

Software Magazine, Sept, 1996 by Joshua M. Greenbaum

RELATED ARTICLE: Plattner: "We Cannot Lock-in the Whole World"

Software Magazine Editorial Director David R. Brousell and Contributing Editor Joshua M. Greenbaum spent a morning at SAP America's West Coast offices in conversation with Vice Chairman Hasso Plattner about the changes SAP is undertaking with R/3 and the company's relationship with Microsoft, among other issues. What follows are excerpts from that conversation.

Q: I had always figured the philosophy of SAP was to really do everything; to be everything to everybody.

A: Yes, I don't believe that we've backed off from that position. Not a millimeter do we back off from that position. I want to see our ERP solutions be sufficient for 90% of the market. We cannot lock-in the whole world.

Q: R/3 seems to be evolving to be more a platform than an application environment. SAP board member Peter Zencke has said that he believes R/3 will eventually be the infrastructure for IS.

A: That was perhaps a misunderstanding. That doesn't mean that we withdraw from manufacturing heavy application components.

Q: The new 'open R/3, will mean a trade-off in integration, too. Zencke said in Vienna that you will have to give up some 10% or 20% of the total integration of the system.

A: I would argue with him. I think it is too early [to tell]. If we play this right, it shouldn't be a [problem]. If you deal with separate components, the implementation costs go up. There's no question, because we have to deal with two different implementation themes. It is cheaper to use the prefabricated SAP integrated system because the integration works the same.

Q: Microsoft wants to own the infrastructure, too. Are the two companies on a collision course?

A: One of the questions we have to settle is on interfaces.

Q: Windows NT is evolving as a leading R/3 platform. Where does NT stand in the R/3 market?

A: New shipments vary between 30% and 40% on NT. These are nearly all in Europe,. 5% are in the U.S. Why? It is simply because we are much further down in the [low-end] market in Europe than we are in the U.S. It is moving upwards, but this is not a question about whether NT will eat up Unix. For us, NT is the vehicle to go down to the low end of the market and keep it as simple as possible, and install as quickly as possible.

Q: Does Microsoft agree with that strategy?

A: Yes.

Q: But they recently had an announcement with Baan and Compaq where they basically said: `NT belongs in the big installations, not the small installations.'

A: I'm not opposing that.

Q: But is it technically feasible to take NT upstream?

A: Yes, I would say high-end NT is in the middle of the Unix systems [in terms of functionality] today.

Q: On the development tool side, do you envision something like Visual Basic or Power-Builder becoming an R/3 development tool?

A: Add-ons. Not core development tools. Every company using SAP has a significant team with ABAP/4 knowledge, so we have perhaps a few hundred thousand people in the world programming in SAP technology. We have perhaps 10 times as many people sitting around very small companies doing Visual Basic. Why should we exclude them from having any chance to do a job in an integrated system?