INDUSTRY ANALYSIS
SAP and Microsoft Focus on Integration

While all eyes were focused on Oracle (Nasdaq: ORCL) closing the PeopleSoft deal this week, a series of announcements from SAP (NYSE: SAP) and Microsoft (Nasdaq: MSFT) may prove to be even more significant to the IT industry overall and to CRM specifically in the long term.

Within the next five years SAP and Microsoft will change the landscape with their efforts in integration and replatforming.

Consider these points:

1. SAP and Microsoft agree on the importance of replatforming applications. In case you haven't heard of replatforming, it's the term Microsoft is using to describe the shifting of line-of-business applications from Unix to Windows. SAP, Siebel and what had been PeopleSoft are included in the effort. On December 28 Microsoft published the "Solution Guide for Replatforming Line-of-Business Applications from Unix to Windows." This guide is written for project managers who are moving their CRM, ERP and financial support systems (FSS), and it includes six chapters of guidance for system integrators. The guide starts with a TCO discussion, followed by guidance on the database layer, followed by guidance on stabilizing the change of applications, with final chapters dedicated to deployment and operations.
2. SAP's NetWeaver will gain momentum one portal at a time. What's interesting about the latest SAP and Microsoft development tools announcement is that SAP Enterprise Portal customers can now use Microsoft development tools to create applications on the SAP portal platform. Both companies announced the release of a portal development kit for Microsoft.NET within SAP's NetWeaver, which gives 40,000 SAP customers on the Windows platform Microsoft Visual C# and Microsoft Visual Basic .NET development flexibility on the SAP Enterprise Portal platform. This is just another of many application tool announcements that further the integration of software from these two companies.
3. Saying SAP is ABAP proprietary is so 1999. What's clear is that there are many more options for SAP customers who want to integrate with Microsoft platform components than were available just three years ago. The speed of integration innovation between these two companies is worth keeping an eye on. SAP's tentative move to J2EE with the dual-mode Web Application Server announcements of less than three years ago look anachronistic when compared to the flurry of activity around Microsoft integration.
4. If you can't buy it, integrate to it. While no one will ever know just how close these two companies came to merging, the roadmap of integration plans is becoming populated with software development kits, adapters on BizTalk Server and other integration tools that signal a high level of cooperation between the companies. Expect for that to expand and deepen.
5. What's amazing is that there are so many CRM, SCM and ERP vendors who claim they have the best practices nailed for SAP integration. A few actually do, but most don't. The SAP-Microsoft announcements lay a foundation for the truth to come out about the many vendors who offer SAP integration but have trouble delivering. Consider not only the ABAP adapter development efforts but also the ability to create order workflows that traverse multiple systems. The side effect of this collaboration is that the bar is being raised for all vendors who rely on selling into SAP-centric companies. And that's the best news of all for companies looking to invest in CRM, SCM or order management applications who want to be assured of SAP integration.

The bottom line is that SAP and Microsoft are busy turning integration into a competitive weapon. Both companies have the patience and development resources to make it happen -- and every company that has an SAP system today will benefit.