SAP’s NetWeaver’s Challenge

WSJ writes:

NetWeaver, belongs to a family of software known as middleware that links different computer programs. This segment is becoming increasingly important in the battle for global dominance among large software companies. Many analysts expect the edge will go to the suppliers that can sell the broadest range of software to big companies, and middleware is emerging as a crucial plank in that range.

SAP faces several challenges, some of which have been homegrown. “This was the probably the most important development in SAP’s history, and they managed to confuse the entire planet about it,” says John Parkinson, chief technology officer of Cap Gemini SA, a consulting firm that works with SAP to implement software for corporate customers.

SAP hopes the new NetWeaver software, which the company is in the process of rolling out, will help drive revenue growth in a market where price competition is cutthroat and customers have been reluctant to open their wallets for costly technology projects.

But SAP failed to explain properly what the software package meant for customers, says Mr. Parkinson. Now, the company is addressing the issue, he says, and “they’re getting the message right, but doing it one customer at a time.”

SAP says one key benefit of the new product is it allows customers to access and track data more easily that might be stored in different programs, such as a database and a purchasing system. Edmund Toben, chief information officer at consumer-products company Colgate-Palmolive Co., New York, says the software helps his company take information about sales linked to customer promotions that is housed in one program and feed that into a separate program used for managing the supply chain. Colgate, a longtime SAP customer, has been able to move such data in the past, “but it was more cumbersome,” he says.

Analysts and customers say it is still too early to judge the success of the software, which so far is being used by only a fraction of SAP’s more than 23,000 clients.

NetWeaver has the right ideas – I hope it succeeds. The story just goes to show how important positioning and education is while trying to sell something new.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.