It's the million-dollar question: Will service-oriented architectures (SOAs) lessen dependencies on expensive enterprise resource planning (ERP) systems, according to Joshua Greenbaum, principal of Enterprise Applications Consulting in Berkeley, Calif. He said one implication is clear, though: SOAs will give more power of choice to ERP customers.
Organizations already have "a lot of functionality in their software; they need to unlock it, recombine it and build new functionality in a service architecture," Greenbaum said. "In a well-developed Web services world, you will be able to pick and choose the services you like from any vendor, as long as your architecture lets you do that. From the customer standpoint, this is freedom of choice."
Recognizing this, ERP heavyweights like Oracle Corp., in Redwood Shores, Calif., and SAP AG, in Walldorf, Germany, are racing to be the infrastructure platform of choice, Greenbaum said. SAP's NetWeaver integration and application platform is the technical underpinning to the company's Enterprise Services Architecture (ESA) strategy. And Oracle's Fusion middleware is the technical foundation for its next generation of applications, dubbed "Project Fusion."
"The theory is, you can do anything you want in a Web services world, as long as the interfaces work well together, but there will be a lot of institutional inertia toward working with products and companies you know," Greenbaum said. "Once you get the infrastructure in place, if you're using NetWeaver [for example], you'd be inclined to take a fresh look at SAP first before you pluck something out of a competitor's offering."
NetWeaver brings together many of SAP's components and tools, such as the Web application server, enterprise portal, business intelligence, composite application framework and NetWeaver Developer Studio. SAP has already rolled out several new applications based on NetWeaver and its ESA, including mySAP Customer Relationship Management and SAP xApps packaged composite applications.
According to Ian Kimbell, vice president of mySAP ERP marketing, NetWeaver provides the prerequisites for a service architecture. "You need a repository for services; you need a platform to build services on; you have to have an analytic capability and a portal," he said.
Similarly, Oracle's Fusion middleware provides "a set of applications and technologies that help customers pull together disparate environments," said Fred Studer, vice president of ERP marketing at Oracle. Among the elements included are the BPEL Process Manager, the JDeveloper 10g and an application server.
Both companies claim their infrastructures enable ERP customers to begin an incremental move to an SOA today, and that their next generation of products based on these infrastructures will offer easier and less costly upgrades and migrations -- and ultimately more choice.
"When you moved to the client/server world, you had to throw away your old mainframe system," Kimbell said. "With ESA, we want to avoid that large technology break, by making it compatible with previous and new versions of SAP. There will still be upgrades needed, but whether you need to still do an upgrade of the whole system is open."
He continued, "I can't expect customers will be a 100% SAP shop. ESA is modular; you may call services from other systems." With ESA, he said, it will be "cheaper and easier to maintain the system landscape than before. This lowers the total cost of ownership."
According to Oracle's Studer, "Customers are looking for the ability to solve critical business problems in an incremental way, without disrupting their business." He said Fusion middleware will provide a means to automate and simplify upgrades for Oracle's PeopleSoft and J.D. Edwards users, as well as for Oracle users, and provide a path to Project Fusion, which will meld the best of the three product lines.
Regarding Oracle's strategy, Patricia Dues, president of the Oracle Applications Users Group, said, "Oracle has made a good business decision; everyone is not going to be only Oracle-centric, and they will have applications that come from other vendors, so they [Oracle] are now facilitating that with the architecture."
Whether an SOA will lower the total cost of ownership for ERP is unclear, she said, but "it may control cost and identify costs better, and it will streamline the upgrade process."
Concluded Greenbaum: "It will take some new thinking to leverage what a service architecture can provide. For the next five years this will be defined by the need to get to an infrastructure that lets you do that."