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SAP (NYSE: SAP) was founded in Germany in 1972 as Systemanalyse und Programmentwicklung ("System Analysis and Program Development") by five former IBM engineers. The company acronym was later changed to stand for Systeme, Anwendungen und Produkte in der Datenverarbeitung ("Systems, Applications and Products in Data Processing").

SAP’s best fit is with large, complex, multi-national organizations that can utilize their highly flexible ERP application software solution. SAP has excellent supply chain integration and workflow control and their product can address virtually any back-office business process requirement. The depth of functionality and flexibility comes at a cost, however, because SAP solutions are generally the most expensive and take the longest time to implement. 

Along with competitor Oracle, SAP’s penetration of the enterprise software market has forced the company to focus attention downstream to the middle market. SAP has made several efforts to streamline their implementation process and template their ERP software solution to make it more suitable for middle market organizations, however, success has been very limited and the company remains at the high-end of the cost and time-to-deploy range.

The R/3 enterprise software product offers a true, three tier distributed architecture that allows SAP to claim independence from any one database vendor. While this ubiquitous structure allows them to be database neutral, the data abstraction layer prevents the use of most reporting and analysis tools that read directly from the database. There are also significant questions and debates about whether similar levels of performance are available across available databases. The SAP development environment is much less of an industry standard. The company has migrated its ERP software product using its proprietary NetWeaver architecture. While NetWeaver is an SOA (service oriented architecture) and XML foundation tool, it is nonetheless proprietary to SAP and imposes yet another software technology tool to learn for already over-taxed IT shops.


SAP is the world's largest business software company and the third-largest independent software provider in terms of revenue. The company focuses on six industry sectors, including process manufacturing, discrete manufacturing, consumer products, service industries, financial services, and public services. SAP also offers more than 25 industry solution portfolio solutions for large enterprises and more than 550 micro-vertical solutions for midsize companies and small businesses.

  • Process manufacturing;
  • Discrete manufacturing;
  • Consumer products;
  • Financial services;
  • Consumer products / consumer packaged goods (CPG); and
  • Government, public sector and public services.


SAP application software strengths include the following:

  • Depth of feature sets and software functionality;
  • Software flexibility and extreme configurability;
  • Workflow and business process automation;
  • Scalability to accommodate the largest customer companies and governments in the world.


SAP application software weaknesses include the following:

  • Software complexity in both the implementation and post implementation utilization;
  • High software cost, particularly when recognizing the high professional services and maintenance costs;
  • Difficult and high risk application software implementations;
  • High cost of recurring software maintenance and software upgrade costs;
  • Time to deploy;
  • Data access.


SAP's primary competitor and arch rival is Oracle Corporation.

Other competitors include Infor, Lawson, Microsoft Dynamics and QAD.


SAP will continue to battle competitor Oracle in the global tier 1 ERP, accounting software, supply chain software, manufacturing software and human resources/payroll enterprise software markets. The two software giants control nearly 50 percent market share for the packaged application software market. While Oracle pursues a proven hybrid growth strategy of both organic and acquisition growth, SAP has historically limited its growth strategy to organic means, however, has fundamentally changed this strategy with recent acquisitions including business intelligence (BI) maker Business Objects.

Both Oracle and SAP continue to be laggards in the high growth ERP software as a service (SaaS) market. Oracle gained an entry into SaaS with its January 2006 Siebel acquisition and almost as a by-product inherited the Siebel OnDemand CRM solution (now named Oracle OnDemand). Oracle has taken a very slow approach to evolving and promoting its SaaS CRM software solution and in the process fallen well behind the more focused pure play SaaS CRM software companies such as

SAP's SaaS approach has resulted in both an unclear strategy and a troubled journey. Among much fanfare SAP announced its SaaS ERP solution, named Business ByDesign, in September 2007. While SAP initially positioned the hosted ERP software for small and midsize businesses, it later imposed user count and cost minimum's which would exclude almost all but the very largest midsize businesses. The company then failed to deliver the on-demand product as prescribed and when it was finally released to a very small beta market, the SaaS ERP product failed and was sent back to the drawing board. Now three years after the release party the product is still not released and SAP's SaaS strategy is even less clear. Several industry followers speculate that SAP views SaaS as cannibalizing its traditional products, may not make SaaS a key strategy within the company and that the Business ByDesign on-demand ERP software was more of a defensive tactic intended to delay purchase decisions and slow client erosion from the SaaS pure plays such as

On Demand ERP Systems  

SAP Software Evaluation

SAP Aktiengesellschaft
Dietmar-Hopp-Allee 16
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On-Premise ERP Reviews
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QAD (in development)
Lawson (in development)


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sap review
, erp software, sap software evaluation, oracle financials, infor, peoplesoft, qad, microsoft dynamics gp, accounting software, on-demand, siebel ondemand



























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