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Chapter 8
FROM INTERNET-ENABLED TO CLOUD COMPUTING
Cloud computing can be defined in simple terms as the delivery of a software product to a
user via the Internet. The user typically accesses the cloud product through a Web
browser or a lightweight (meaning small and simple) application for a computer or mobile
device. Cloud computing is not a completely new concept, rather it simply represents the
latest stage of the development of computing and the Internet. To better understand how
cloud computing will impact ERP system development, it is useful to review the
development of SAP’s ERP systems with the advent of the Internet.

SAP and the Internet
226 In 1996, SAP introduced its joint Internet strategy with Microsoft. The core of SAP’s first
effort to integrate the Internet with its products was the Internet Transaction Server (ITS)
a server-based software system that enabled efficient communication between an SAP ERP
system and the Internet. To provide some context for the state of the Internet at this
time—in 1996, Amazon.com was only one year old, and the online travel agencies Expedia
and Travelocity were both just being founded. Many other Internet services we take for
granted today did not exist at this time.
In May 1999, SAP announced mySAP.com, a new strategy designed to completely
realign the company and its product portfolio. The goal of this initiative was to combine
e-commerce solutions with SAP’s existing ERP applications, using cutting-edge Web
technology. In 2000, SAP began building on the mySAP.com vision by adding the
capability for electronic marketplaces and corporate portals.
NetWeaver
In 2004, SAP introduced its first version of SAP NetWeaver, a collection of components that
support business transactions over the Internet by providing seamless connectivity of diverse
applications. By the end of the year, over 1,000 customers had acquired the product. With
the introduction of NetWeaver, SAP announced that it was planning its future initiatives
around the concept of enterprise service-oriented architecture (enterprise SOA), with a goal
of making all of its business applications service based—to provide its customers with the most
flexibility possible.
E-commerce needs are driving companies to connect their business applications, such
as ERP systems, both internally and externally through the Internet. Software designed
with an SOA can be quickly deployed and reconfigured as business conditions require
changes to the applications, databases, and other infrastructure hosted in data centers
owned by a company. The combination of software tools that enables an organization’s
various systems and applications to communicate with other applications is called
Web services. SAP’s NetWeaver is a Web services platform that allows various vendor
applications to share data over the Internet.
Companies continue to warm to the idea of Web services and SOA. Information Age’s
“Effective IT” research report found that 50 percent of enterprises have some sort of SOA
strategy. One benefit of adopting SOA is the ability to quickly add new applications,
making the organization more responsive. SOA also relies on open standards, allowing
easier integration of software and offering the potential to reuse computer code, which can
reduce the time and cost of implementing new systems. This aspect of SOA is certainly
enticing, especially when compared with traditional systems that are often cumbersome

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