SAP released the fourth enhancement package for its ERP 6.0 (enterprise resource planning) application on Wednesday, furthering a recent shift in product strategy that forgoes periodic full upgrades and adds new functionality on an incremental basis.
SAP is using the enhancement packs to entice customers to move up from older ERP platforms. The latest release includes all the features from the initial three, plus hundreds of new ones.
Areas of improvement include finance, human resources, plant and operations, procurement and product development, as well as specialized features for various verticals, including automotive, defense, banking, retail and utilities.
The enhancement pack strategy seems to be working so far, according to one longtime SAP observer.
"The cost of acquiring this kind of innovation is minimized to the customer," said Joshua Greenbaum, principal of Enterprise Applications Consulting in Berkeley, California. "A couple customers I've talked to are already forgetting how hard these kind of upgrades used to be."
Even as it makes continued improvements to its on-premises ERP platform, SAP is launching a new campaign to sell on-demand software to large enterprises. The company has hired former Oracle applications executive John Wookey to lead this push.
Wookey had been a driving force behind Oracle's ongoing Fusion Applications strategy, which will combine the best attributes from Oracle's business software lines into a next-generation suite.
His work at SAP will have no bearing on Business ByDesign, SAP's nascent on-demand ERP (enterprise resource planning) product for the midmarket, a spokesman said.
It's not likely that SAP's on-demand plans, however successful, will overtake its core business, according to Greenbaum.
"Not just SAP, but the entire market is really going to evolve toward a hybrid model," he said. "Some [types of software] can flip over to the cloud, but a company like SAP ... is going to have its highest-value products on-premises."
