This is an old post but it comes up on top of Google search when looking for "SOAP vs OData" in SAP domain. (I'm guessing because someone edited the post in 2024.)
Because of that, I'd like to add some corrections / clarifications to the answer that is currently listed as "Accepted".
1) It talks about "web services" as if it only applies to SOAP. But both SOAP and REST (which OData uses) are in general web services (see Wikipedia).
2) Both OData and SOAP rely on HTTP protocol (what doesn't these days? 🙂 ). SOAP can technically use SMTP but I've never seen an implementation like that in SAP space.
3) Historically, SOAP web services became available in SAP systems first. They were generated from the ABAP function modules and maintained in SOAMANAGER transaction. (Note that there is also SOA = Service-oriented architecture, this is not the same SOA as in SOAP, fun stuff.)
4) Even though SOAP services can still be used and developed, they went out of favor generally (not just in SAP) because REST-based OData services are less "bulky" and gained more adoption in IT outside of SAP. Also, latest ABAP programming model (ABAP RAP / ABAP Cloud) is focused on OData service development. Therefore this is usually the first (but not the only) choice for SAP integration.
Bottom line, it's not as simple as "SOAP = old = bad, OData = good" but in general, SOAP services are used much less these days.
SOAP, REST, and OData are not SAP terms. I'd encourage to read the general information about these (e.g. wiki articles linked here) to become familiar with terminology in general.
Cheers!
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