Friday, December 12, 2014 at 11:52 am
For a long time, Unix looked to be the most fertile ground for seeding Hydro-Agri North America’s extensive ERP applications. Installed at the agricultural chemical and fertilizer distributor were two high-powered Hewlett-Packard Co. Unix servers running SAP AG’s R/3, with a third off-site for disaster recovery purposes. Systems analyst Jim Wiedrich, who ran the operation, was a self-described Unix fan, dubbing the “backslash” mark in Windows/DOS “backwards.” His preference? Leave Windows to the desktops and other non-mission-critical applications.
Wiedrich began to consider plowing new fields, however. With information systems dollars scarce and a low crop yield of Unix programmers, Hydro-Agri last year decided to root its future enterprise resource planning applications in Windows NT. The Tampa Bay, Fla., company pulled out its Unix servers, save for the database server, and replanted six Compaq Computer Corp. ProLiant servers with SAP R/3 applications on NT.
Why the shift? As Wiedrich admits, conventional wisdom would dictate choosing the more scalable Unix platform, given that Hydro-Agri is on a rapid expansion path. The $900 million North American subsidiary of Norsk Hydro, of Oslo, Norway, is farming new terrain in chemical and fertilizer manufacturing as well as in distribution. But it was that very growth that precipitated the move to Windows NT. “As we grew, we needed to upgrade the performance of our systems,” Wiedrich explains. “With the HP systems, we had to have an HP guy come out and upgrade them after-hours. With the Compaq [Windows NT] platform … we can go in and add components without bringing the system down. And we can do it ourselves.”
Hydro-Agri’s shift to Windows NT is emblematic of what’s happening with ERP in general. At ERP leader SAP, more than half of all new licenses are for NT platforms. Even last year, with NT versions of R/3 modules only first available, 22 percent of SAP’s new customers chose that platform. The trend is expected to continue this year–particularly among small and mid-size organizations (from $200 million to $2.5 billion in revenues annually) implementing ERP, according to Scott Lundstrom, director of research and enabling technologies at Advanced Manufacturing Research, a Boston-based consulting group.
One major reason is Microsoft Corp.’s dead aim at the enterprise market. “Microsoft is a much more focused application platform than Unix,” Lundstrom says. Despite many attempts to unify the “Heinz 57 varieties” of Unix flavors, each provider adds its own mix. And “backwards” slash or not, Microsoft has given application vendors a focused product, he says.
There are other reasons users are migrating from Unix into NT territory, Lundstrom says. “Windows NT is simply lower-cost than Unix solutions,” he says. A PC server capable of running an ERP application typically starts at around $10,000–about half the cost of a Unix server. Add to that some aggressive pricing by Microsoft Corp. on the operating system side, and the Unix system may be out of reach for most small to medium-size businesses, Lundstrom says.
But it’s not a perfect growing season for Windows NT. Performance and scalability issues need to be addressed, and some changes to the NT file structure are required before the fruits of the platform can be fully realized with ERP. Also, the fact that Unix is a mature operating system with a large contingent of ERP add-on software gives it an advantage.
For Hydro-Agri, Unix definitely had a leg up two years ago when the company sent out an RFP to 25 ERP vendors. A user panel from the company chose SAP, however, partly because Hydro-Agri liked its aggressive plans for NT, along with the software’s data accessibility and configuration flexibility. Hydro-Agri implemented Phase 1 of its ERP deployment in eight months, running initially on the HP 9000 Unix platform with an Oracle Corp. database. The company estimates that the installation of back-office functions, such as accounting, finance and cash management, has saved the company more than $1 million by better managing and controlling inventory flow and costs.
In Phase 2 of the installation, Hydro-Agri added profitability analysis and reporting applications to the system, giving managers real-time cost and revenue information online. Then, last year, the company began plans to migrate its SAP applications to NT from Unix, leaving the Oracle database on a single remaining Unix server. “It worked better than expected. On Friday, we were running on the Unix boxes, and on Monday morning, we had the applications running on Windows,” Wiedrich says. By the end of this year, the Oracle database will be transplanted as well, moving onto a new Compaq ProLiant 7000 server running under NT.
It’s not just users that are finding NT to be fertile ERP ground. The operating system has become the testbed platform of choice for leading ERP vendors SAP and Baan Co. “You’ll see all of our newest versions of our applications show up first on NT,” says Allen Brault, director of NT business development at SAP’s Waltham, Mass., office.
While SAP has led the way among ERP vendors pushing the NT platform, other vendors are catching up. Baan’s NT products have only been available for eight months and they already comprise more than 10 percent of new shipments, says Anil Gupta, vice president of industry marketing at the Menlo Park, Calif., company.
The ERP vendors are finding that moving to NT opens up new markets among smaller, non-Fortune 500 companies. “Our growth market is now from the sub-$200 million- up to the $2.5 billion-size company,” says Steve Rietzke, head of SAP’s Microsoft partnership, based in Bellevue, Wash. “That’s where NT is making the most impact.”
Driving ERP’s success in that market is price. “Windows NT hardware and software are cheaper than the Unix versions,” Lundstrom says. That lower price comes from both prices for the software licenses and the cost of the hardware platform, he adds.
And even if Unix vendors lower hardware prices, as Sun Microsystems Inc. has done at times to counter Intel Corp. servers, PC servers still have an advantage, notes Hydro-Agri’s Wiedrich. “When I’m finished with a Unix server, it doesn’t go anywhere else for use. With a Compaq server, I can use it as a Notes server or, if worst comes to worst, I can cannibalize the parts for other servers and even desktops,” he explains.
That lower price also attracts customers who couldn’t afford ERP software on a Unix platform. That was the case at $47 million Green Mountain Coffee Roasters Inc., in Waterbury, Vt. “We wanted a solid ERP system, but it would have been nearly impossible to justify if we had chosen a Unix system,” notes Jim Prevo, CIO at the coffee retailer and wholesaler. Green Mountain opted for a three-tier client/server system after attempting to brew its own ERP system. Already a Compaq shop, the company decided the high-end servers would be more than adequate to meet its ERP needs. In early 1997, Green Mountain purchased 17 modules from PeopleSoft Inc., and by early June, seven were percolating: general ledger, accounts payable, purchasing, production management, bill of materials and routing, cost management, and inventory management.
Scaling new heights
The momentum behind NT doesn’t mean the combination of Unix and ERP is going away, however. “Among our large customers with large deployments, Unix remains their primary platform,” SAP’s Brault admits. NT is simply not ready for those large deployments, explains Lundstrom, because it lacks the fault tolerance and redundancy of Unix systems. Former Unix devotee Wiedrich agrees. “We run an 8 a.m.-to-8 p.m. shop. If we were 7-by-24, I don’t know if we could have chosen Windows NT at the time we did,” he says.
Others acknowledge that NT’s areas of vulnerability include its scalability. That may be remedied soon in NT 5.0 when Microsoft, of Redmond, Wash., includes an LDAP (Lightweight Directory Access Protocol) directory structure. Without the LDAP directory, converting files from the database to the NT front end is sluggish.
NT 5.0 will also include a single-sign-on feature that will allow users to log in to NT and get rights to SAP R/3 at the same time, says Edmund Yee, manager of network operations at Chevron Canada, a user of SAP on NT. Chevron Canada is beta testing NT 5.0. “Currently, you have to log on twice, so the single sign-on will make things a bit easier for the users,” Yee says.
Adding to NT’s limitations is its close ties to Microsoft’s own SQL Server database, which doesn’t scale as well as others, according to AMR’s Lundstrom. Coming soon, however, is a new release of SQL Server with improved scalability.
But perhaps one of the biggest hurdles to running ERP applications on NT is the relatively limited crop of add-on tools–for example, performance enhancement and application management software–that have been ported to the platform. “There are a number of those types of tools that simply aren’t available to Windows NT users,” Lundstrom says. Prevo at Green Mountain agrees, although he notes that many of those tools may not be of much use to a company of his size. “Even if we had those tools, it would have taken way too long to learn how to use them. That’s why we used an integrator and some PeopleSoft contractors–people with experience there–for our project,” he says.
However, notes Baan’s Gupta, many of those tools are being built into NT because it is application-oriented, which he sees as a plus for the operating system. “Backup and file copying are fully integrated into NT,” he says. “With a mainframe environment, you’d have to go buy a Tivoli [Systems Inc.] product or a [Computer Associates International Inc.] Unicenter product to do that.”
Further down the line, there are other technology improvements under way on the hardware side to strengthen NT’s roots in ERP. Compaq, in Houston, has made ERP a priority on its systems and has established several SAP Competency centers to provide a testing environment for companies interested in SAP on an Intel platform. (See story, left.) Compaq is also bundling Baan software along with Microsoft’s BackOffice on its servers. And recently, Intel has announced that it will begin working with SAP to ensure that the Intel platform is well-suited for ERP applications.
A close fit with the hardware will be key when the Intel platform moves to 64-bit microprocessing next year with Merced, making it roughly equivalent to Unix microprocessors. Realistically, though, it may be another year or so before NT servers are robust enough to stand shoulder-to-shoulder with large, entrenched Unix servers.
For one thing, apart from a few vendors, such as Sequent Computer Systems Inc., NCR Corp. and HP, large eight-way servers are not generally available on the Intel platform running NT. That will change with Merced, but it won’t happen overnight, analysts say. And even if it does, it would take some time and a compelling reason to dislodge bulletproof Unix installations. “You’d have to have a pretty compelling case to toss a system that’s working, just to replace it with new technology,” AMR’s Lundstrom says.
And Unix vendors themselves aren’t standing still. “As Windows NT is moving more towards 7-by-24 operations, Unix systems are moving to five 9’s [99.999 percent uptime] in reliability. So the bar is moving in both areas,” says James McDonnell, group marketing manager for personal information products at HP, in Palo Alto, Calif.
Vendors’ strong backing of NT has given some large companies the confidence to move at least some of their ERP applications to the platform. For example, Chevron Corp., in the United States, has standardized on SAP running on Unix, but the company’s smaller Canadian branch chose NT, says Yee, manager of network operations for the company, based in Vancouver, British Columbia. While the U.S. operation has more than 7,000 users, the group in Canada counts only about 180 active users. Because SAP has provided ways to migrate between the two platforms, the groups are able to share information. “We grab information from their servers when we need it,” Yee says.
R/3 can be configured to have the database and application running on Unix, while the presentation appears on Windows. In Chevron’s case, the Canadian database is run on NT, while the U.S. database runs on Unix. While the two systems don’t interact on a constant basis, Yee says there is no problem in converting the Unix database information into NT.
And while Unix has been appropriately advertised as a more stable platform than NT, Hydro-Agri’s Wiedrich has found a hidden advantage to moving to the more desktop-oriented platform. “When the Unix server went down, we had to either call me in or call someone from HP in to fix it. With the Compaq servers, about half the time, the desktop guys can make any adjustments. It’s nice not having your beeper go off every weekend,” he says. Even if that backslash does look “backwards” to him.