In-Depth

SAP: Once-and-Future Analytic Powerhouse?

SAP is no slouch in the analytics department—as its surging growth in IDC’s recent business analytic market surveys demonstrates.

• By Stephen Swoyer
• 12/13/2006

Enterprise resource planning (ERP) giant SAP AG probably isn’t the first name that comes to mind when you think of business analytics, but—if SAP officials have their way—it soon will be. After all, they argue, SAP generates and (to a degree) "owns" much of the data that third-party analytic tools mine for information. That gives it priority-of-place (i.e. first dibs) if nothing else.

Nor is SAP a slouch in the analytics market, officials contend, citing the company’s ongoing analytics push (http://esj.com/business_intelligence/article.aspx?t=y&EditorialsID=7537) and its surging growth in International Data Corp.’s recent business analytic market surveys. For the record, SAP grew its analytic business by 21.1 percent in 2004 and by 15 percent in 2005. That gave it the third-fastest growth rate in both years, behind only Microsoft and Cognos Inc. (in 2004), Microsoft and Business Objects SA (in 2005).

There’s a further wrinkle here, says Sanjay Poonen, a former executive with Informatica Corp. and—as of early this year—senior vice-president and general manager of analytics with SAP: the analytics market itself is trending toward SAP. "There’s always been this kind of expectation that when the big guys [SAP, Oracle, and Microsoft] got their acts together, it was going to be very difficult for the standalone players," he comments. "Our investment in the analytics area, our recruiting of top talent, our commitment from the top down to analytics—we’ve been executing on our analytic vision, and the growth you see is a result of that."

It’s a good time to be doing business analytics, Poonen says.

"People have invested an enormous amount in transactional systems. The traditional gripe is that you’ll get the transactional systems to automate your processes, but you need to go to a separate vendor to manage them," he comments. "Fundamentally, we think analytics is not a bolt-on process to a normal business process. It needs to be embedded in the process itself. If you’re filing an expense report, or engaging in [travel] itinerary reporting, you expect to see your year-to-date spending as a part of that process. You don’t expect to see it refreshed from a nightly data warehouse."

More to the point, Poonen says, many users likely no longer want to rely on a separate, dedicated tool to do analysis. While some classes of users—business analysts or power users, for example—will always be more comfortable using dedicated tools, most users aren’t and won’t ever be, he says.

What’s more, Poonen argues, the increasingly service-enabled lay of the enterprise application-scape means that users won’t need such dedicated tools because analytic capabilities can be embedded in applications of all kinds—homegrown, productivity, knowledge-based—via well-defined Web services interfaces. In the near future, Poonen indicates, organizations will be able to stitch together composite applications that consist of nothing but (or mostly) services. This is another case in which SAP, with its service-enabled NetWeaver architecture, will have a compelling story to tell, he says.

"The whole idea that analytics need to be embedded as a process requires an SOA and an enterprise services repository that’s rich, and we’ve been doing this for several years now," he comments.

Enter SAP’s xApps, vertical-specific analytic applications that—as composite applications—are much lighter than comparable standalone tools, such as SAP’s Business Explorer. SAP currently offers xApps geared toward product lifecycle management, supply chain management, manufacturing intelligence, and other tasks. Example xApps include Cost and Quotation Management (xCQM), Integrated Exploration and Production (xIEP)—an exploration and production (E&P) life cycle optimization tool—and xApp Product Definition (xPD).

SAP also gives customers a means to rapidly design and build their own xApps, via its model-driven analytic development tool, Visual Composer. That tool enables user-friendly drag-and-drop application development, Poonen says. "The whole idea of [model-driven development] is that you can build an analytic composite application and a transactional application on the same screen," he argues.

Of course, SAP still supports and enhances Business Explorer (BEx), the (venerable) analytic front-end to Business Information Warehouse (BW). "BEx is a key component of many of the 12,000 customers who deploy NetWeaver BI, and will likely remain so," Poonen confirms.

Even so, Poonen and SAP seem to believe that composite applications are the wave of the future, if only because they will enable organizations to expose analytic capabilities to hitherto untapped—namely, rank-and-file—user constituencies. In this regard, he speculates, the composite applications of the future might take the form of portals, dashboards, Microsoft Office-centric hybrid applications—in which standalone Office tools consume services from a variety of different providers—and other interfaces.

On the Office front, especially, Poonen cites SAP’s collaboration with Microsoft on the Duet project, which he describes as an unprecedented collaboration between software vendors. "There are going to be people who start off with a portal, and maybe will use dashboards, too. But there are 400 million people using Office applications across the world. It’s a very common and familiar interface to people like my mom and dad, for example," he comments. "For analytics, [we believe] Excel, PowerPoint, and Outlook will be very important. There are definite use cases for the Duet scenario to complement casual users and power users alike. Our goal is to create integration between the Office toolset on the front end and the power of the Sap infrastructure so that the value of our analytic applications can manifest themselves."