SAP Gains Edge With Lighthammer

SAP (NYSE: SAP) announced today it would buy Lighthammer Software Development, which makes applications that help manufacturers monitor and manage their plants.

"Lighthammer was already a good partner of SAP's, and was primarily sold as a value-add layer over solutions like SAP manufacturing, so it makes utter sense for SAP to wrap Lighthammer into the SAP offering," Evan Quinn, group vice president, IDC, told CRM Buyer in an e-mail.

SAP will sell Lighthammer's Collaborative Manufacturing Suite as an SAP xApps composite application on NetWeaver. Composite applications, such as SAP's xApps, combine services and data applications into loose bundles. The individual building blocks can be mixed, matched and reused.

New Capability

"This purchase gives SAP direct access to plant floor equipment and systems that they have not had before," Jane Biddle, vice president, manufacturing research, Aberdeen Group, told CRM Buyer.

It also allows SAP to follow through on its promise to deliver applications using ISA-95 standards for manufacturing interoperability.

Lighthammer gives SAP a competitive advantage because it is ahead of the curve in easing the link between the manufacturing process and the supply chain, Quinn said.

Leading Edge

"Lighthammer was at the leading edge of a couple of trends," he said. "Architecturally, Lighthammer used a service-oriented approach, so [it] should fit nicely into SAP NetWeaver, and into the coming era of composite applications. Real-time collaboration and real-time analytics (what IDC calls 'intelligent process automation') are quickly becoming de rigueur for the next generation of enterprise applications -- these were the real differentiating pieces Lighthammer adds to the manufacturing automation puzzle."

SAP said it has a customer base of more than 12,000 manufacturers. The companies did not disclose financial terms of the deal , but said it would be complete in July.

SAP said the 60 employees of Lighthammer, a privately owned company, will continue to work in Exton, Penn. They will be absorbed into SAP America and SAP Labs.

"Acquiring Lighthammer supports SAP's strategy of enabling adaptive business networks, or ABNs, for our customers," Nils Herzberg, SAP senior vice president, said in a statement. "Essential to enabling the ABN is bridging the disconnect between the shop floor and the enterprise through what SAP refers to as adaptive manufacturing -- the ability of a manufacturer to profitably replenish the supply chain while dynamically adapting to unpredictable change. The SAP Lighthammer combination exemplifies the ABN vision."