Has SAP got its act together?

It has often been said that the monolithic software vendors such as Oracle and SAP are only paying lip service to SOA and that they have a vested interest in prolonging sales of in-house software to ensure they maintain existing revenues and profits.  It was with this view that I read Jeff Kaplan’s recent article What SAP can learn from SalesForce.com.  Jeff suggests: “Part of the problem is SAP is too entrenched in its on-premise software mentality and perpetual licensing approach to make a dramatic shift to an on-demand model”.  Jeff goes on to say that: “Rather than focus on building its own SaaS solutions, SAP should encourage SaaS developers to create web services and APIs that connect to SAP’s products”.  In the past I would have to say that I agreed with this view, however, I recently had the good fortune to meet with the Managing Director of TDS, Thomas Jürgens, and have changed my mind.  TDS is a medium sized German IT and outsourcing company that specialises in SAP solutions.  This was a bit of an education for me, as in the main my experience has been in working for very large companies that service major corporations and government organisations. TDS, as a mid-range supplier of services to the upper end of the SME market has had to get quite creative about its approach.  Yes TDS has a large number of SAP experts who can provide implementation services, but it also has developed a series of business processes that it sells on a managed service basis that are backed off to… yes you guessed, SAP.  The net result is TDS has developed additional functionality on top of SAP and sells it as a business service on a subscription (per user) basis.  So it would appear that SAP is already going down the path of encouraging third parties to create and resell services based on its software.  The key here is not that these services have been created, but that SAP has agreed a set of commercial terms with TDS that allows them to sell SAP based services on a subscription basis.  That has come about because TDS is targeting the SME world and not the Enterprise world, but I suspect, given that the structures are already in place, the same sorts of deals will appear in the enterprise environment a lot quicker that we initially thought.