Research Summary: Market Overview – The Market For SAP Optimization Options

Published on May 15, 2011 by R "Ray" Wang

Forward And Commentary

This market overview provides a starting point to SAP customers seeking optimization solutions.  The document delivers actionable advice and insights into a proven collection of software solutions.  As part of the full series, best practices documents will follow with in- depth case studies and a critical product evaluation of this growing market of SAP optimization solutions. 

A. Introduction

With the average Global 2000 ERP deployment nearing 11.5 years in service, ERP customers face a significant challenge with updating their existing investments. Installed pre-Y2K, users have attempted to work around the best practices of the ‘90s while seeking innovation and application agility. Subsequently, SAP users face three main challenges:

  1. Higher cost of ownership that reduces overall ROI.
  2. An aging and brittle infrastructure that hampers innovation.
  3. Increasing complexity that hampers greater adoption.

B. Research Findings

As SAP customers choose their go- forward apps strategy, interviews from 100’s of clients show that four paths emerge (see Figure 1):
  1. Stay with status quo;
  2. Move to shiny new SAP.;
  3. Stabilize SAP and augment; and
  4. Modernize SAP and surround with best-of-breed.
Figure 1. The Four Paths Of SAP Optimization

 

Consequently, an $80.1 billion third-party SAP ecosystem has emerged to address nine key areas (details on each vendor in the official report):

 

1. Application extension and usability – Adobe, ERP-Link, Informatica, Revelation Software Concepts, Synactive, Tibco, Winshuttle

2. Application life-cycle management – CA/Hyperformix, Hayes Technology Group,  HiLn Solutions, IBM Infosphere Optim, Informatica,  Intellicorp, Panaya, Revelation Software Concepts, TIBCO Hawk, Tidal Software, West Trax

3. Office productivity integration – Alloy, Duet, Winshuttle

4. Integration – Informatica, Information Builders iWay, SEEBURGER, TIBCO

5. Database optimization – Microsoft SQL Server for SAP, IBM DB2 For SAP, TIBCO ActiveSpaces Data Grid

6. Archiving, storage, and data management – EMC, IBM, Informatica

7. Virtualization – EMC, Informatica, VMware,

8. Third-party maintenance – Rimini Street

9. License management and optimization – Flexera Software, Susen Software, Used Soft

The Bottom Line: Be Pragmatic Not Dogmatic

SAP still plays a significant role in the apps landscape for most organizations. However, the days of an all SAP or nothing environment are coming to an end. Business leaders suffering under the wrath of an SAP CIO have taken matters into their own hands and voted by choosing SaaS options for their business units. Constellation recommends that organizations take a pragmatic not dogmatic approach to optimization the SAP investment.

C. Report Links

Get the full market overview highlighting the capabilities of the key firms delivering SAP Optimization solutions.

If you are an ASUG member, download the full report. Ask your ASUG representative.

Buy the full research report on the Constellation Research website.

Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

Your POV

Which path of SAP optimization have you taken?  Have you worked with any of these optimization solutions?  We’d love to hear from you!  Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (dot) com

Please let us know if you need help with your enterprise apps strategy by:

  • Developing your enterprise apps strategy?
  • Addressing disruptive technologies like Social CRM, Cloud Computing, SaaS deployment, and Two-Tier ERP?
  • Assessing the ROI of a Two-Tier ERP strategy?
  • Working on legacy optimization projects!

Resources and Related Research*

20110303 Product Review: Inside SAP’s Line-of-Business OnDemand Strategy

20100808 User Event: SAP Australian User Group Summit

20100802 Vendor Event: SAP Teched 2010 Las Vegas

20100518 Event Report: Sapphire 2010 Brings Customers Back To A New Sense Of Normalcy

20100512 News Analysis: SAP Bets On Innovation With $5.8B Sybase Acquisition

20100302 Tuesday’s Tip: When To Go With A Two-Tier ERP Strategy

20091203  Strategy: 5 Lessons Learned From A Decade Of Naught

20091222 Tuesday’s Tip: 10 Cloud And SaaS Apps Strategies For 2010

20091208 Tuesday’s Tip: 2010 Apps Strategies Should Start With Business Value

20091102 Best Practices: Lessons Learned In What SMB’s Want From Their ERP Provider

20091006 Tuesday’s Tip: Why Free Software Ain’t Really Free

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2011 R Wang and Insider Associates, LLC All rights reserved.

(Read the full article @ A Software Insider’s Point of View)

  • Chris – we see a lot of this. However, long term that strategy will collapse on its own weight as IT must struggle to support what was once innovative and will lack the resources to make it work well. Agree on 10th ecosystem! Thanks! – Ray

  • Hi Ray,

    My recent experience has been implementing SAAS/Cloud solutions, such as CRM, chosen by the business units usually with no authorization from IT. In fact, IT is often opposed to these sorts of moves as it erodes their control/power.

    While it may tie into #1, I would add a tenth ecosystem and that is best-of-breed replacement of business unit functionality.

  • Hello Ray,

    I am the CEO of a new company by the name of Renderprise,LLC and I understand that you are interested in highly disruptive technologies especially in the ERP arena. I would like to personally introduce you to our newly released “Enterprise Rendering” technology that allows an enterprise to mobilize in minutes or at most hours, any SAP (3.1 thru ECC 6.0 and custom SAP code)functionality, business processes, information and content on any browser enabled device, running on any mobile platform or network. We do much more than that and it will amaze you, I promise!!!

    I would greatly appreciate your comments,

    Mark Kucera
    CEO, Renderprise

  • Martin – thanks for the feedback and input. As we update the list, we’ll keep a tab on the vendors that are making a difference. Anyone else with a solution we missed? – R

  • Hi Ray-

    Step 9 omits Xpandion’s-LicenseAuditor- a relatively new and powerful contender, in my opinion- in the SAP license and optimization arena.

    “LicenseAuditor, Xpandion’s advanced solution for optimizing SAP licenses, enables the smart purchase of future SAP licenses, as well as the intelligent management of dormant, underused, misclassified, and duplicate accounts.”

    My company selected Xpandion because their software is external to SAP and therefore we were not forced to deal with any downtime to our systems. Surprisingly, the implementation was extremely fast; the results, fairly immediate- and the savings to us was substantial. My two cents on the matter.

  • Karen – great point. There probably is this 10th category. That’s something Amy Wilson and i should write up! As for how it all fits:

    Shiny New SAP – No
    Modern SAP w/ Best of Breed – Maybe
    Augmented SAP – Most likely

    What do others think?
    -R

  • So, where do the SAP BPO providers with their SaaS “wrappers” like NorthgateArinso with euHReka and Exaserve with Exalerate fit into the SAP optimization landscape? BPO should be a 10th area that customers should evaluate.

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