Stefan Ried

U.S. Department of Justice Approves Oracle Acquisition of Sun

expected from most M&A experts but still a mile stone for Oracle. The regulators approved the deal yesterday.

Oracle has pulled off a series of aggressive acquisitions over the past five years, establishing a comprehensive portfolio of packaged business apps and middleware infrastructure. The acquisition of Sun Microsystems not only complements Oracle’s software stack but also secures a segment of hardware customers that typically run Oracle software. The acquisition is welcome news for most Sun customers, as long as Oracle keeps Sun as a whole. The future will meanwhile be totally undetermined if Oracle sells Sun’s hardware part of the business at some point. Other vendors will have to make significant changes to their strategies and ecosystem priorities to respond to Oracle’s move.

Read the full Forrester Report with a impact discussion on the portfolio and Oracle’s ecosystem here.

In addition to the official Forrester Report about the deal, I just wanted to share the echo from the press with you:

CIO (GER)
SAP-Kunden im Visier – Die Strategie von Software AG und IDS Scheer

July 15, 2009 http://www.cio.de/markt/analysen/891743/index1.html

Computerwoche (GER)
Software AG und IDS Scheer – Das sagen die Analysten

July 15, 2009 http://www.computerwoche.de/knowledge_center/erp/1900752/

Computing (UK)
Software AG Squares Up To SAP With IDS Scheer Buy

July 14, 2009 http://www.computing.co.uk/v3/news/2246050/software-ag-contests-sap

Computing (UK)
SAP Faces New Competition From Software AG

July 15, 2009 http://www.computing.co.uk/accountancyage/news/2246096/sap-face-competition-software

Computable (NL)
Software AG buys IDS Sheer for Consultancy

July 16, 2009 http://www.computable.nl/artikel/ict_topics/soa/2995913/2204519/software-ag-koopt-ids-scheer-om-consultancy.html

Accountancy Age (UK)
SAP faces new competition from Software AG

July 15, 2009 http://www.accountancyage.com/accountancyage/news/2246096/sap-face-competition-software

V3.co.uk (formerly VNUnet)
Software AG squares up to SAP with IDS Scheer buy

July 14, 2009 http://www.v3.co.uk/v3/news/2246050/software-ag-contests-sap

Software AG acquires Business Process Modeling Expert IDS Scheer

IDS Scheer is a business process consulting firm with only 19% revenue contribution of its licensed software products. Although the public perception was dominated by the product positioning, this fact justified the relative low price based on its € 399 million total revenue in 2008. The ARIS product family is a leading business process modeling tool that mainly resonates to the European culture along the separation of business process analysis and planning from the implementation in a BPM system or another traditional IT system. While US customers tend to use more the modeling tools provided by the BPM runtime engines. IDS managed to gain significant market share with non-technical business analysts. The ARIS process modeling is complementary to Software AG’s current BPM offering and a natural fit for the European market. IDS Scheer’s second product branch called ARIS Business Performance Edition is a BPM runtime monitoring which observed the process performance of BPM runtime environments. Software AG has to figure out how to capitalize this asset as it overlaps with the Business Activity Monitoring (BAM) solution which was acquired via Software AG’s first major acquisition of WebMethods in 2007.

Please see the full blog on Forrester’s blog space.

See the full Forrester report on the IDS acquisition here.

SAP and Cloud computing: Two Strangers Meet

SAP and cloud computing has multiple perspectives. Let’s sort out the various options.

Cloud computing falls into two basic branches. Basically Cloud infrastructure and Software as a Service business applications in the public cloud.

See also the cloud taxonomy proposal.

SaaS applications and SAP

SAP is not addressing SaaS with any general available product. Unfortunately neither SAP Business By Design, which position as SaaS ERP application for the SMB market segment, nor the large enterprise SaaS SRM application, recently announced by John Wookey at SAP, is generally available as of today. Third-party vendors have SaaS ERP solutions out there, like Netsuite or Workday.com. Some are even addressing specifically collaboration with SAP systems. For example, a central SAP instance at a company’s headquarter can be connected to multiple business entities of small subsidiaries around it. These subsidiaries might run with Netsuite which is hosted in the cloud and connected to the master SAP system.

There are also multiple ways to integrate SAP systems to SaaS application like CRM in the public cloud environment. Forrester calls this “Cloud-Legacy integration”. Leading vendors to look at Integration as a Service are Boomi.com and Hubspan.

Bottom line: SAP indents to provide software as a service but does not delivery until now.

Cloud Infrastructure

The characteristic of cloud infrastructure is a highly scaled elastic infrastructure provisioning. We distinguish between public cloud offerings like Amazon’s EC2 and private cloud options. In the latter ones you embrace the scalability concepts of public clouds but keep the ITt resources in-house.

Many software vendors like IBM and Oracle offer special tools and license models for cloud environments like EC2. SAP does not offer any specific license or tool for cloud environments to my knowledge. However, you could leverage private cloud infrastructure to run smaller parts of the SAP Netweaver landscape. Cloud computing for SAP works best with server clouds and not really with fine granular scale-out clouds. In this flavor cloud computing in private environments is basically the continuous evolution of virtualization and dynamic provisioning methodologies that have been around before. For SAP, frameworks like flexframe are more relevant than ever. Unfortunately SAP’s scalability concept requires quite big servers per process (due to the table caching of ABAP) and does not scale well on a large farm of smaller servers which is a efficient model in cloud computing. Again, this statement depends on the specific Netweaver component and the general version of SAP that you use. The Netweaver portal for example has better scale-out capabilities in a cloud environment than the ABAP core which tends to scale up better on single large servers.

A immediate cost reduction is very likely if you look for the first approach to cloud computing at the development and test instances of your SAP landscape. Moving all test and dev machines into virtual environments is the first learning step for SAP in the cloud.

More Forrester reports explain background and defining the terms that are used in this text.

http://www.forrester.com/go?docid=47100

http://www.forrester.com/go?docid=54794

http://www.forrester.com/go?docid=54043

http://www.forrester.com/go?docid=44229

http://www.forrester.com/go?docid=46817

Please share your experience around cloud computing and SAP with us and leave a comment.

Stefan

Yet another XaaS!

Communication as a Service is already defined by an Wikipedia entry:

“Communications as a Service (CaaS) is a type of outsourced enterprise communications solution where a third party vendor (known as CaaS vendor) is responsible for the management of hardware and software required for delivering Voice over IP (also known as Voice as a Service), instant messaging, and video conferencing applications using fixed and mobile devices. A synonym for CaaS is Unified communications as SaaS (Software as a Service). The CaaS model has evolved in the telecommunication industry in a similar manner to the SaaS model in the field of software delivery. It is an example of the everything as a service trend and shares many of the common characteristics. The evolution of the CaaS industry is probably because CaaS and SaaS share philosophies and they both require networking capabilities and have an on-demand delivery system.”

Many vendors like Avaya, HP, Cisco, Siemens SEN would be capable to move their stacks into a SaaS model. However most are hesitating too long and it looks like to war about CaaS is now open. Google announced on June 16 that it intends to get 1 million phone numbers reserved.

It’s time to fix strategy and move fast for the other vendors, Google will dominate this market very fast otherwise.