SAP: No Longer a One-Trick Pony in the Software Market

Shai Agassi resigned from SAP (SAP) 13 months ago. But because of the way large corporations such as SAP work, the Sapphire user conference in Orlando May 5-8 is really his last SAP event. Not much has happened during the first two days of the conference except for new SAP NetWeaver business process management [BPM] capabilities which strengthen SAP’s 21st century technology platform, Shai’s major legacy. These capabilities deliver on the NetWeaver innovation road map of April 2007 which he would have been working on prior to his departure.

Together with the recent release of the SAP 20-F and management comments to financial analysts after the SAP financial-results release of April 30, 2008, the Sapphire NetWeaver BPM announcement also highlights the revenue success the product is having. By my methodology, NetWeaver revenue is nearing $2 billion on a trailing 12 month basis (SAP says it’s only a billion euro but I believe it uses a different methodology than I do).

Either way, the key statistic is that SAP says 37% of that revenue is for standalone NetWeaver instances. That does not mean that the user was never previously an SAP user (although that is true in some cases). It means that the middleware is being used for traditional middleware purposes such as integration, web/application serving, software development, etc. irrespective of which applications—SAP’s or other suppliers’ or in-house developed—that the middleware is integrating, serving, developing, etc. It’s not just tying two SAP application instances together (some of the other 63% is heritage SAP BI but the total does not include Business Objects).

That makes SAP a major middleware player, right up there with IBM (IBM), Oracle/BEA (ORCL), TIBCO (TIBX), Software AG and implicitly Microsoft (MSFT), from a standing start just a few years ago.

SAP has also quietly put together a community of 350,000 Business Process Experts [BPX)] from among its users, integrators and other partners. Agassi was one of the early posters on the BPX when it was launched a few years ago.

In other words, by any measure, SAP is no longer a one-trick pony in the software market. In my opinion, Agassi is the person that foresaw the need for SAP to enter that space aggressively and laid out the plan to get there. Wherever he is today, driving around in one of the “green cars” he’s building in his new endeavor, he can toot his own horn.