Executive Interview: SAP Labs' Dennis Moore

As the senior vice president for SAP's Cross Applications Division at SAP Labs, Dennis Moore is driving SAP's embrace of composite applications. Such applications, which comprise multiple Web services, should simplify how solution providers integrate SAP with other applications. In an interview with CRN Editor-in-Chief Michael Vizard, Moore talks about how SAP is making it easier for solution providers to partner with the company and explains how composite applications, combined with SAP's X-Application framework and NetWeaver application integration engine, will change the nature of enterprise computing.

CRN: How will solution providers now find it easier to work with SAP?

MOORE: There were always two issues. One was the technology and second was the business model that makes it compelling for different companies to work together. Over the past two years, there has been a great improvement in the technical capability of integrating with SAP. And Web services standards will make it a little bit easier for partners to build a composite applications that will work on a PeopleSoft, SAP backbone or someone else's environment. Today, we have about 15 x-apps partner products in the pipe line. Over time, 80 percent of those applications will be built by partners.

That leads to the business model issue. SAP has become a partner-friendly ecosystem. We understand that partners need to create value for our customers in a way that would be more economically efficient for us than if we were to create it. In the past, there were enormous costs to join the partner program and all kinds of education you had to do. And you had to have an executive sponsor and three customers. We're using partners in a much more strategic way rather than the more tactical view that many enterprise software companies had. The result is that there is a sustainable area in the ecosystem. And we are going to have to do much better as an ecosystem host than we have been before. I think over the past few years with programs like Powered By NetWeaver, we've really had huge success in that direction.

CRN: How does one become an SAP partner and how many levels are there?
MOORE: As part of our application partner nomination process, we select one and only one partner for each topic area. We have another program called Powered By NetWeaver where we can have as many partners as are interested. [At the lowest level is] our SAP Partner Network. The Powered By NetWeaver program is a level above SPN membership. Anybody can be a member of SPN. Powered By NetWeaver is a program where people develop solutions. So the top of the pyramid is the partner program where we have both services and application partners. We don't have technology partners there. The technology partners are all part of the Powered By NetWeaver program.

CRN: How do you work with the higher level application partners in terms of going to market?
MOORE: SAP markets jointly with the partner. We book the order on our paper so customers are not afraid of the risk because we stand behind it and we guarantee that we will keep it working even if the partner doesn't survive. Having a relationship with SAP is not a bad thing. But now we're making a simpler program to understand. When a company submits a nomination, it is evaluated by the industry and business product groups where it is closely related. If they agree that that is not a space that they have an immediate interest in building their own products, then we go to market with the partner after they have passed the technical certification. We help them with the engineering. We help them with the design. And we help them with the recruitment of hiring customers for feedback.CRN: How does the Powered by NetWeaver program work?
MOORE: Powered By NetWeaver is pretty heavily marketed into our existing partner base as well as members of SPN. Anyone can nominate themselves to be a member. SAP people can also nominate partners. It is a fairly simple process to become a member. Benefits are things like easier and cheaper access to SAP resources, as well as software and service and marketing opportunities. In contrast, becoming a member of the X-App program is a bit more complicated and rigorous because we're making a long-term commitment. We're making a commitment to our customers that buying this is as safe as buying any SAP software.
If you think about it, it is an ecosystem. You can't have two identical predators. So when we get into these very deep commitments with our partners that the X-App program represents, we have to select the one that we think is the best value for our customers. A couple of times where people have proposed very similar solutions, we had to make a call one way or the other.

CRN: What is the primary reason why SAP has outperformed its enterprise rivals over the last few years?
MOORE: Over the past few years, we've probably seen a fairly dramatic difference in our revenue picture versus some of our competitors. I would attribute a lot of that to having a much better understanding of the vertical industries than our competitors do. We are much more industry-specific with our products than most of our competitors are. If you're a pharmaceutical company, we have the pharmaceutical functionality. If you are a high-tech manufacturer, we have the high-tech manufacturing product. We have a very large fraction of the business processes that most companies need to operate, right out of the box. That reduces implementation time and upgrade costs. And now with the NetWeaver platform, we have a very simple way to allow you to extend that. One of the most attractive reasons partners work with us is that our market share is greater than the sum of the next four or five competitors combined.

CRN: How does your approach to Web services differ from IBM's and others?

MOORE: There are similarities and there are differences. Our architecture is really designed to enable companies to be more adaptable and have flexible application infrastructures. Our architecture is much more focused on application than on infrastructure and there are some functional differences. But in the end it all comes down to every vendor proposing a services-oriented architecture based on a very small set of standards that are rapidly consolidating. If you look at our DNA, you would probably understand where we're coming from. The components, the engines that will power the very complicated transactions, are not going to change very often. The transaction that does the payroll entry for an employee shouldn't change very often. The business process in which you pay people might change more frequently, but probably not that often. The business process by which you staff projects, on the other hand, might change relatively frequently. One of the key insights that we're all sharing is that there are these atomic components. There are composite applications that assemble them, and the business process and the components are separated. This is why you can use the same component across different countries, across different industries, on different user interfaces.

CRN: What impact will composite applications have on computing?
MOORE: The user experience is going to undergo a very significant change over the next two or three years. For example, one of the big changes that we'll have in enterprise applications over the next few years is that you won't file an expense report as a transaction. You'll file a transaction report as part of a process. You won't have to call somebody and say, "When am I going to get paid for this?" You'll have a dashboard where you can very quickly and easily see the status of anything you're doing.

CRN: How will composite applications change the way we view deployment of systems?
MOORE: One of the key things we're moving to with composite applications is that the cost of deployment will go down dramatically. First of all, you won't have to change from Siebel CRM to SAP CRM to get the composite application from SAP. It will work on both. So the cost of changing that infrastructure will go away. And a lot of the difficulties of connecting two systems will be at least reduced if not completely go away.CRN: What needs to happen next to take Web services to a higher level of usage?

MOORE: The technology that is really needed is model-driven development, which would allow all this to be much more practical and economical. To a certain degree, we're getting closer to the world where programmers build services and business experts build business processing. The kinds of tools that are used to build services are complicated, sophisticated, modeling tools. The kind of tools that a business process expert could use to model a business process is not one of those. The tool that those people need is very different from the tool that a programmer would use.

CRN: How will these change the way people interact with applications?
XMOORE: I think one of the insights that drives the computer industry today, whether we realize it or not, is that biology has tried a lot of different things and come up with certain things that work. The second half of this decade will be driven by anthropology-sociology technology. It is not a technical question anymore about computers. Technically they work, more or less. The question is how do you use them to make people happier, more effective and more productive. That's really an issue of how do you socialize people on computers.
For example, a travel agent might not know how the banking system works but he can ask for payment. That is how software is evolving. With Web services we finally have an architecture to make software systems work like biological or ecological systems. That is more realistic and we already know it works.

CRN: What should solution providers take away from all this?
MOORE: If you're a partner and you want your customers to really continue to see value in staying with you, then you have to provide a value application. Partners need to provide real domain expertise and real innovation. And more and more customers will look for partners to bring in innovation and teach them how to adopt new practices. One of the benefits of using a partner, for systems integration, for example, is there are things that you have to learn once and then you know them forever. If a partner can amortize those costs across multiple customers, all of those customers benefit.