The Future of Enterprise ApplicationsAn Intelligent Enterprise RoundtableEnterprise applications — whether for traditional enterprise resource planning or newfangled "ERP II" processes such as product life cycle management — form the central nervous system of the intelligent enterprise; as they go, your entire business goes. But that obvious claim begs the question: Where are they going? In this Intelligent Enterprise roundtable discussion, we asked a group of technology experts representing enterprise application solutions providers to offer their views about how a vortex of emerging customer requirements are forcing them to rethink how their companies develop, market, and maintain business-critical software. Our four panelists are Peter Gassner, vice president and general manager of the technology division at PeopleSoft; Cliff Godwin, senior vice president of application technology at Oracle; Peter Graf, senior vice president of product marketing at SAP; and Lenley Hensarling, group vice president of product management at J.D. Edwards & Co. IE: Rod Johnson of AMR Research wrote in Intelligent Enterprise last year, "To support the real environment that exists in most businesses, vendors must design their applications to operate on data they do not own, through a presentation tier they did not design, and most of all, to run on an application server they didn't build." Do you agree with this statement? Hensarling: We probably all have to agree. Customers have a set of legacy apps. They also increasingly have tie-ins with suppliers and customers, so the software has to be sufficiently flexible to accommodate broad data sets, interactivity, and interoperations. Gassner: I don't think it's the only valid scenario, but it certainly is the ideal one for customers in some situations. They want to access data from multiple sources and run it in multiple presentation layers and on multiple applications servers.
Godwin: At Oracle, we have a mixed view. I certainly agree that the people who buy our applications are often deploying them in a heterogeneous environment and to operate in a larger business-to-business process, so obviously we can't assume that we're the "single source of truth." What we are seeing in terms of people redesigning the user interface varies considerably by what part of the application is involved. For example, there are strong branding requirements for customer-facing applications. But in other areas, such as financials, I don't see many customers investing in radical UI redesigns. Graf: In these days, the most important thing is to help customers extract additional value from investments they've already made. Companies are not looking to rip and replace systems, they're looking to extend them. To drive new value out of your current IT infrastructure, you need to leverage existing applications as well as technologies. For example, many companies have IBM and Microsoft in place, so it's important that a technology platform designed to help companies drive mission-critical business processes is not only interoperable but fully extensible through Microsoft and IBM WebSphere or other J2EE [Java 2 Enterprise Edition] platforms. Thus, we allow you to extend SAP solutions using non-SAP application servers. However, as it comes to delivering SAP solutions, SAP will continue to do so using its own Web Application Server. IE: What other emerging customer requirements do you foresee as being the biggest challenges in the next three to four years? Graf: In addition to improving openness, interoperability and ease-of-use, increased flexibility of business solutions is a major requirement. SAP has laid out a strategy around that requirement and started to deliver on it. We talk about applications that snap on to existing IT environments. We call them xApps, because they run on top and across a heterogeneous set of applications and databases. This new category of software, sometimes referred to as packaged composite applications, provides the added flexibility needed, while again leveraging existing investments. Gassner: Over the short term, customers are looking for more robust systems, shorter implementation and upgrade times, and more usability. We hear a lot not only about customers consolidating onto a global system, which forces requirements into the software, but also about improving the "total ownership experience." Hensarling: I agree. One of the key things we need to deliver is more value. We also have to deliver easy access to that value, and the portal, as a central organizing principle, becomes the key to doing that in a manageable way. Godwin: Keep in mind that in this economic environment, it's one thing to convince people that projects have a good ROI [return on investment]; it's quite another to get the threshold costs sufficiently low so that people want to do the projects at all. To echo Peter Gassner, we're seeing a lot of projects involving systems consolidation — consolidating regional instances and multiple systems into a single deployment that supports a worldwide model. Meeting the requirements posed by highly consolidated operations is definitely a theme that our customers care a lot about. Hensarling: I have one twist I can add to that: We're also seeing a broad acceptance of the idea of breaking up things into bite-sized chunks; instead of buying a complete enterprise application suite for CRM, for example, customers are trying to package things so that they can get more granular ROI. IE: On the topic of ROI, Oracle is dedicating a lot of resources to its outsourcing division, and SAP and PeopleSoft appear to be interested in the concept as well. For which customers is that model most viable? Godwin: We have indeed put a lot of investments into outsourcing. It doesn't make sense for a lot of our midmarket customers, in particular, to develop and maintain the skill sets associated with enterprise applications when they could just buy them as a service. We've also found that some large organizations are interested in outsourcing as well — mostly because we've improved the software so that they can live with standard, out-of-the-box functionality. That makes it much more practical to get them on the outsourcing train. And a lot of customers just like the low cost of operation and predictability involved. They can put their resources into the business, not into redesigning core systems.
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