SAP goes digital: Can it sell and run simple?

SAP is going digital native and promising that customers will be able to point, click, buy and implement with ease. The burden of proof will remain with the enterprise software giant.

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SAP execs are at the company's SAP Sapphire powwow in Orlando preaching "run simple" again and putting some meat to the rhetoric by launching digital and cloud versions of its product. The promise is that you can shop for SAP applications just like you would at an e-commerce outlet.

What remains to be seen is whether SAP applications are simple enough to run and acquire simply. Let's do the quick overview of SAP's digital moves.

  • On Tuesday, CEO Bill McDermott preached run simple and S4/HANA, its next-gen suite, and withheld details on the product much to the chagrin of analysts. "Quite frankly, we were disappointed with the lack of specificity around S4HANA in the both the keynote and analyst events (we did not hear much new at all, except for revising 1Q's 370 S4HANA customers to "over 400")," said Stifel analyst Brad Reback in a research report.
  • SAP did roll out digital native offerings designed to buy from the company without an invoice or request for proposal (RFP) process. Buy and run is the promise along with transparent processes.
  • SAP's CRM product, SAP Digital for Customer Engagement, launched online at $29 per user per month. This move is a bit late, but the target is Salesforce. CRM seems like a proven and natural cloud-first channel for SAP. Lumira is another option for the cloud and is $995 per user.
  • S4/HANA's cloud edition was launched at Sapphire on Wednesday. The goal here for SAP is to migrate its Business Suite customers to S4/HANA. Customers are interested in S4/HANA, but there's more work to do for SAP to get the masses on board. Rimini Street's survey on S4/HANA is worth a read and analysts noted that S4/HANA demos were more PowerPoint presentations than actual code.

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Regarding S4/HANA Wells Fargo analyst Jason Maynard said:

At this early stage, we think that there are many customers that don't yet understand the value proposition of S/4 HANA. It is our view that this can't be a revolutionary product upgrade while the underlying code has still not been completely rewritten. Because of this, we think that it will be several years before the company benefits from this product cycle, and ultimately will still need to rewrite the Business Suite to get customers to undergo the pain of a major Enterprise Resource Planning (ERP) replacement.

Those aforementioned bullets are some big hurdles to clear. The good news is that SAP's digital strategy now includes one spot to poke around and do homework on the applications. Surely, the SAP Store allows you to browse simply. But I can't help but look at SAP's digital wares and wonder about the fine print. That fine print isn't as much of a worry for digital-first software providers.

That skepticism about SAP's simplicity will take time to a) prove and b) believe for the customer base. If over time, SAP proves to be easier to implement and buy via subscription it'll get to keep its customer base. But let's get real: The burden of proof will be on SAP.

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