I have been quiet about SAP Influencer Summit 2011 for several reasons:
- Despite the disruption the recent SuccessFactors acquisition announcement has caused, there's still plenty to chew upon and that takes time and the garnering of many perspectives both inside and outside the company.
- My focus has been very firmly in the developer camp. While SAP alluded to some of the issues surrounding developer ecosystems, again, they need further amplification.
- The TIBCO partnership needs explaining and I had to wait for the call into that company.
- My video business partner Jon Reed and I have been up to our necks videoing Business ByDesign customers and SAP insiders. That absorbs a lot of time.
Anyhoo - here's my take.
SAP and the Cloud
SAP expects to close the SuccessFactors acquisition by the end of January. That meant the company was necessarily constrained in what it could say about its cloud strategy. No amount of prodding and poking was going to get any SAP executive straying from the party line and that's fair enough, even if it is incredibly frustrating. That meant that any meaningful discussion on this topic will have to wait a month or so. It also meant that many of the 'cloud' sessions were bland.
However, what was obvious is that in the anticipated shake out, Career OnDemand is a (near) racing certainty as a major casualty. The evidence comes in the notable absence of the solution from most slide presentations. SAP cannot say that publicly and in fact denied it (as they must) but that's my bet.
As for the rest, Co-CEO Jim Snabe set out an intriguing vision of application, platform and infrastructure layers that, if meticulously orchestrated, create an interesting competitive landscape for the future. He positions the SuccessFactors deal as one that injects new DNA into SAP at a point when it needs to get out of its on premise comfort zone while adding speed to market in areas where SAP has struggled and opening up opportunities for massive volume uplift in deals. Colleague Brain Sommer notes that SAP has been slow but observes:
Data points from SAP suggest that the ship has turned but it may not be as far out of the harbor as buyers might want. Maybe, if the company gets its cloud engines to full steam, it will be a more formidable and relevant competitor to Workday and Salesforce.com.
Over the years, SAP has had a very specific impediment that goes something like this in a predictable three step process:
- It seeks opinion from folk like Brian and I and listens intently
- SAP then takes what it heard and finds every way imaginable to make the solution complicated.
- It then finds out that wasn't a great idea and goes back to what it should have done in the first place.
I'm generalizing but that's mostly how things shake out. This time I think things are different. It seems that SAP has finally realized that competitors are too nimble and that its lead as a provider of business apps can be eroded very rapidly. Interestingly, SAP has finally understood that you can make a lot of revenue from low priced apps like SuccessFactors. This is something I hammered at with co-CEO Bill McDermott last May. Its due diligence on SuccessFactors has provided proof positive. Now the fun starts as SAP re-architects its sales force to maybe drink a different brand of champagne - only a lot more of it.
The developer story
During Jim Snabe's keynote, he made the point that in his opinion, most future growth is going to come from the SME space. If correct (and I think he is bang on the money), SAP is going to need hundreds if not thousands of apps to support vanilla solutions like ByDesign and BusinessOne. While SAP has millions of developers in its community, it doesn't have enough of the right kind of developers who can work in agile fashion.
A number of colleagues agree that SAP has to radically simplify enablement of the developer community in technologies like HANA, Sybase Unwired Platform, Gateway, NetWeaver and others. I heard at least four senior execs recognise that need. More to the point, they were all singing a similar tune quite independent of one another. That is very good news and bodes well for the future.
There is a lot to be done but I see a willingness to act that has been missing in the past.
The TIBCO partnership
I'm a long time fan of TIBCO largely because it is a neutral player in the business apps space. I was surprised by the partnership announcement because I am aware there have been difficulties in the relationship between SAP and TIBCO that go back some years. Even so, barely a year goes by without someone speculating an acquisition by SAP. I won't go there but instead want to amplify the partnership deal.
There are few details in the public domain, in large part because both companies are in or entering a quiet reporting period. At the event we saw an enigmatic video recording of Vivek Ranadivé, CEO TIBCO talking about in-memory (think SAP HANA) and real time (think TIBCO) but little more. I spoke with Murray Rode, COO TIBCO as I wanted to get some understanding about what this means. He said: "Spotfire and HANA provides an approach to the big data problem and reinforces the notion of value coming from fast, visual analytics. Spotfire is going to want to reach as many data sources as possible for things like sentiment analysis. What SAP offers is in many ways traditional BI but customers have demonstrated they need 3D visualization and we bring that to the table. Tibbr can benefit from a large data store like HANA. In very general terms, we think the world of social media solutions is driving its own big data phenomenon and Tibbr plays very well in those situations."
Long story short, TIBCO helps SAP fill gaps in analytics and social computing in the context of customers needing insights from huge volumes of data going through the SAP HANA system and in real time. For TIBCO, it's about opening up new markets. In my call, there was no real talk about middleware but that has to be a discussion going forward.
Jon Reed and I shot two videos with ByDesign customers, both of which provide very different perspectives on what is happening in that market. Lufthansa Revenue Services, an arm of the airline of the same name is adopting BYD as a replacement for an R/3 system. That's fascinating as it is part of what will be an ongoing 'tier-2' story in subsidiaries of major SAP customers. That video is online now.
The second was with a startup where SAP won in a competitive bid that included NetSuite. That video will be produced shortly but provides fascinating insights into why customers are choosing SAP in those circumstances. In a nutshell: in an even competitions, some customers want to be aligned with their larger market competitors who are already using SAP.
As an aside, Jim Snabe said the company will hit its target of 1,000 BYD customers in 2011. We will need to hear the formal earnings announcements to verify but if correct, they will have done well in the first full year of release. What's more, SAP now says that close to 80% of all BYD deals are coming via partners. That has to be a relief as it removes a significant cost pressure in that group.
SAP is finally getting its cloud act together but it will not please everyone. For me, the most important topic is around developers and I was genuinely surprised at how far the company has come in a short period of time. The TIBCO partnership has yet to be fleshed out but could be promising and BYD is up and running.
Add in the fact that for my money Jim Snabe gave his most assured performance to date and you have a company that is looking far more energetic than I expected. 2012 is going to be interesting...