Battle to set up a counter in the new business-space

By ADAM GIFFORD

As the internet becomes the space where business is transacted, pressure grows on software vendors to make their software truly "internet enabled."

Large companies have millions of dollars tied up in computing systems from the likes of SAP, Peoplesoft and Oracle. They expect those suppliers to take them into the future.

If the vendors can't deliver, their customers will be handicapped joining the new economy - or they could take their business elsewhere, cutting off the maintenance revenue that fuels the software industry.

The problem is that "client server" systems were based around making best use of computing resources by sharing the application around the system - having some software on the client PC and communicating across networks with software and databases sitting on big back-end servers.

In the new model, the application sits on the server and is reached through internet browsers.

Users also want to access applications with a bewildering array of devices from bar-code readers to Wap (wireless application protocol) phones, so an item can be tracked within a single database from its manufacture to its sale and its subsequent service history.

Enterprise software vendors have spent billions of dollars re-engineering their wares for the new economy, and billions more marketing their e-bility.

If they can't build the solution quickly enough themselves, they form partnerships and alliances with the new companies creating the hot-ticket software - applications such as customer relationship management, sales-force automation, supply chain optimisation and electronic procurement.

SAP, the German company that emerged in the 1990s as the clear market leader in enterprise resource planning software, seemed to be lagging behind some of its American rivals.

The perception was that it took months or years to install and configure its complex software and re-engineer a company's business procedures around it.

Any other software products used had to be integrated at great cost, and a shortage of people who understood the technology added to the maintenance bill.

As might be expected from a German company, SAP tackled its shortcomings as engineering problems first and marketing problems second.

The issue of long expensive implementations was addressed with ASAP - or Accelerated SAP - a set of templates and methods tailored to particular industries.

"EasySAP" was the marketing tag for initial attempts to make the SAP graphical user interface simpler. The time needed to train users was cut by two-thirds.

Last October, it introduced its business-to-business solution, mySAP.com. On the surface it seemed to be saying "this is SAP for the internet," but was it a product, a technology, a new licensing model or a marketing plan?

After a few stumbles in getting the message out, it now seems mySAP.com is a fundamental shift in the way SAP sees itself as a supplier of software. And yes, it does work over the internet.

"People say we are late," Les Hayman, SAP Asia Pacific chief executive, told the Business Herald at the Sapphire user conference in Brisbane.

"Were we late to print the brochures? Were we late to do the marketing? Were we late to tell the world what we had? Yes we were. But I believe the real battle is, can you deliver what you are promising? We showed people delivery."

mySAP.com promises to create electronic marketplaces tying together thousands of businesses around the world.

In Brisbane, SAP demonstrated the mySAP.com marketplace for Australia and New Zealand it has created in a joint venture with Telstra.

Companies such as Qantas, American Express, National Australia Bank and TNT are providing services through the portal, and Corporate Express, Harris Technology, Blackwoods and BOC Gases have already signed up as sellers of products.

Mr Hayman said much of the hype about marketplaces had fallen flat, as companies had been slow to sign up to the single industry portals being touted by dot.com startup companies.

Despite thousands of memorandums of understanding signed between vendors to build marketplaces, only a handful arerunning.

"There is a huge culture change required to build a proper collaborative marketplace," Mr Hayman said.

"Originally marketplaces looked as if they were being set up as buying clubs, but the real benefit of a collaborative marketplace is if everybody gains."

Mr Hayman said areas could exist where competitors could share resources common to all without sacrificing any competitive advantage.

"For example, oil companies can share inventories for drill bits, so instead of 14 companies keeping drill bit parts round the world, they can share inventories and collaborate to bring costs down."