Why SAP Sees a Gold Mine in Portals

The German software giant's latest acquisition points to the next big trend in corporate software.
Jennifer CaplanApril 6, 2001

In less than a week, SAP, the 800-lb. gorilla of enterprise resource planning, spent $400 million to buy TopTier, announced an alliance with Yahoo to go after the burgeoning market for corporate portals, and created a U.S. based subsidiary, SAP Portals.

The steps are intended to jumpstart sales of customer relationship management (CRM) and supply chain management (SCM) software tied to SAP’s flagship ERP systems.

The major vendors of ERP systems have been pushing heavily into both the supply chain and customer relationship markets for at least the last two years, and although portals are a relatively new piece of the equation, Merrill Lynch estimates that the corporate portal market is already worth $4.4 billion. By 2002, the investment bank expects the market to reach $14.8 billion.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

“Essentially the portal has the potential of being the corporate desktop of the future, where employees can easily access all the information they need to do their jobs,” says Henry Morris, VP for applications and information access at IDC.

Yahoo will supply news, market data, and information such as flight schedules. Top Tier, an independent software firm that SAP has been working with since it launched its Web service two years ago, will supply development tools that provide a “drag-and-relate” function.

For example, Top Tier’s products let sales employees use a mouse to drag an order number to a customer icon and obtain the customer name for a particular sales order. The customer’s file and order history can then be called up from the CRM system.

The sales rep can also access Internet content such as stock quotes and news headlines for a particular customer.

“It’s a powerful underlying infrastructure to begin to integrate and extend business processes,” says David Alschuler, VP of E-business and enterprise applications at Aberdeen Group “You can get information from one spot very deep in a system and quickly jump across systems and use that information someplace else without having to navigate big trees of screens.”

Whit Andrews, an analyst with Gartner Inc., says customers, suppliers, and employees will soon expect companies to efficiently manage the increasingly complex relationships with them, and portals are viewed as the mechanism to make that possible.

“The portal creates the impression of a natural understanding of all those inter-relationships in a single snapshot,” Andrews says. “The vendor who owns the portal has the ability to own a great deal of what goes behind the portal.”

But corporate IT users can point to a long track record of big IT projects that failed to live up to their promises. That and the current economic slowdown has made them reluctant to dive into new systems.

IDC’s Morris says, “It remains to be seen how quickly portals will be adopted.”