ERP, IT infrastructure will be merged to cut costs

NEW YORK: Over the next two years businesses will merge enterprise

applications with their IT infrastructure to create a single IT platform to

lower costs and simplify management, AMR Research has predicted.

The concept has been dubbed "applistructure" by the analyst firm,
which has found that up to 80% of a user's IT budget is spent maintaining a

myriad of IT systems within the business. Although standardizing on a single

platform is not a new idea, AMR said demand is being driven by web services,

service-oriented architectures and the need to reconfigure and reuse code.

Erik Keller, research fellow at AMR Research, said the merger of enterprise
applications and infrastructure would reduce the number of technology platforms

and suppliers a user has to manage. At the same time, such a strategy could

offer users more flexible IT. "Cost savings and business flexibility are

touted as the two major advantages of applistructure," said Keller.

The components may come from different companies but they are managed and

guaranteed by a single supplier. The main suppliers will be IBM, Microsoft,

Oracle and SAP, said AMR. These will aim to offer a single, standard

infrastructure platform and thereby reduce IT costs, it said.

According to AMR, IBM's strategy relies on Websphere and business process

outsourcing. Microsoft uses Longhorn - the next version of Windows - and Project

Green, its enterprise software initiative. Oracle gains an applistructure

through its applications, infrastructure and database products. And SAP's

strategy is based on its ERP products, Netweaver and its Enterprise Service

Architecture.

As well as the big four suppliers, open source may emerge as a player in this

area, said Keller.

In selecting the right supplier, AMR said it would be hard for companies with

a large investment in any of the big four to move to a more desirable platform.

But it predicted that suppliers are likely to tempt new customers with quality

guarantees and buying models that place risk on the supplier rather than on the

buyer.

Benefits of an 'applistructure'

• It can continuously decrease the operational cost of information technology
• It delivers secure and reliable service levels and permits upgrades and
  
  product enhancements on the fly
• It permits fast and flexible reconfiguration of business processes
• It allows different technology providers as well as custom/legacy code to
  
  plug and play seamlessly.

Source: AMR Research