SAP 'Ecosystem' Is a Booming Economy Unto Itself
So says an IDC analyst who cites SAP's expansive list of partners (developers, resellers and integrators) and its huge market share. Is this a good thing for the rest of us?
In other words, SAP is a Goliath of Epic Proportions. SAP is The Man. SAP is King. Basically, it's SAP's world, and the rest of are just living in it.
Is that over the top? Hardly. "We have reached a stage where a number of tech vendors, including SAP and IBM , have amassed enough of a base of customers and business partners that could really reshape how companies are going to be implementing the next generation of business applications," Pang said. "So, in that respect, [this news] is very significant."
As of now, Pang, who's IDC's research director of enterprise applications, can't put a dollar figure on just how much the SAP ecosystem is worth (he says he's working on it). But he uses system integrator Satyam as an example of the expanse of SAP's universe. Satyam has nearly 5,000 consultants and developers working for its SAP practice, and it has plans to grow its ERP practices by 50 percent during the next few years, according to Pang. "The average deal size of a SAP implementation at Satyam is about $1.6 million, just on professional services," Pang writes in his report. "With 150 active customers including the likes of Caterpillar, Mittal and Nestle, Satyam could be doing hundreds of millions of dollars in SAP-related projects in a given year."
Oh, by the way, SAP has another key partner on its team: Microsoft. Pang reports that the two-year-old Duet deal alone could pull in at least $100 million a year. "While SAP is on a run-rate to post more than $13 billion in total revenues in 2007, the real size of the SAP-induced economy could be many times that amount," Pang writes. "After all, the vendor has amassed a global network of more than 800,000 SAP service partners and developers whose livelihood will be irrevocably shaped by the SAP ecosystem, which appears to become a thriving economy in its own right."
(Of course, SAP has a long way to go to equal the value of Microsoft's ecosystem. IDC estimated that value—which includes more than 640,000 hardware, software, services and distribution companies and employs 42 percent of all IT industry workers worldwide—at $425 billion in annual revenue.)
