When SAP wants a senior executive to address the faithful about its technology directions – a role historically performed by its previous CEO and co-founder Hasso Plattner – it does not look to CEO Henning Kagermann. Instead, it turns to its rising star – and by some accounts its CEO-in-waiting – Shai Agassi.
Agassi joined SAP in 2001 after the enterprise applications titan spent $400 million acquiring the Israel-based portal software company Top Tier, which was co-founded by Agassi in 1992.
In the following year, SAP went shopping in Israel again, buying another firm controlled by the Agassi family, TopManage Financial Solutions – the basis for SAP's small and mid-sized business (SMB) product, BusinessOne.
Since then, 36-year-old Agassi has moved swiftly up the management hierarchy. Within 18 months of the Top Tier deal, he had become the first non-German to be appointed to SAP's all-powerful executive board. And in March 2005 he took over responsibility for SAP's entire software development activities, having previously been put in charge of SAP's industry solutions group and its product and industry marketing.
Agassi's expanded control comes at a watershed time for SAP's software: the company is in the formative stages of rebuilding its portfolio around a service-oriented architecture (SOA) – the increasingly accepted approach for creating software that is easy to integrate, change and map to business processes.
That is a natural evolution for Agassi. His first job at the company had been to establish and head SAP's portals division, drawing largely on the Top Tier code base. But while many vendors in this area concentrated on the presentation and information aspects of portals, Top Tier's forte was in its use of the portal as an integration broker.
The result was NetWeaver, the SAP applications integration engine launched in 2002. On the surface, this debut might have seemed unremarkable, but Agassi had bigger plans.
Under his guidance, NetWeaver has become the cornerstone of SAP's plans for SOA, although Agassi points out that SAP's Enterprise Services Architecture (ESA) is an even broader model-based, event-driven vision of software delivery: "We are so far ahead that we're not just thinking about how we will service-enable, we're thinking about what the future application looks like, the look and feel of an event-centric application."
This thinking has meant a total overhaul of SAP's code, rewriting it for SOA. "It's a daunting task," observes Bruce Richardson, long-time SAP watcher at analyst group AMR Research. "But make no mistake, this is the next big thing."
As a flavour of that, the re-engineering of the application suite has already enabled SAP to integrate closely with Microsoft's Office suite, with users interfacing with SAP applications from a panel within Office. This opens up a whole new world of potential users for SAP, as well as providing further impetus for customers to exploit SAP's SOA initiative with their own software developments.
The long-term vision is to transform SAP into a business process management platform for the enterprise. The way businesses will differentiate themselves in the future is through process innovation, says Agassi, and SAP's goal is to be at the heart of that innovation. "The CIOs are no longer just the guardians of the data. They're chief process innovation officers. Their main role is to continually innovate processes and make sure the underlying systems are in place [to support] continuous innovation," he says.
To get to this vision, SAP has already invested heavily. Its new architecture will enable the creation of composite applications – applications assembled from the components of various ERP modules and orchestrated by NetWeaver. One key advantage of this: companies will be able to accurately map their applications to business processes, free from the change-inhibiting, monolithic structure that characterises today's applications.
There is a long way to go before SAP converts its entire customer base to the SOA approach, but the effort that Agassi is leading has enjoyed some early success. "ESA is exciting, it's real and it's here today. It is probably the fastest growing product in the history of SAP," he says.
In the last nine months, Agassi has spent $3 million of his own money on SAP shares in the open market. And that has got to suggest a certain confidence in who he thinks will be left standing when the SOA dust settles.