SAP under EU scrutiny: the malaise continues

Can SAP change? The Versata complaint signifies old problems resurfacing that bedevil the company and serve to erode confidence. My sense is they can and will change. The question is when and how.

According to Information Week, SAP is likely to be put under scrutiny by the European Commission for anti-trust activities:

In a complaint filed to the EC, Texas-based software company Versata alleges that SAP “illegally excluded” it from selling to three-quarters of SAP's largest customers by “withholding the information necessary to interoperate”.

Versata also that the German software giant "cloned" its Pricer application, which manages pricing of goods, and bundled the "clone" with its own ERP platform – a move that Versata says is in violation of a European Union treaty article on competitive practise.

According to investigation documents, the German software giant took steps to marginalise the firm after an SAP executive noticed that Versata was “raking in the cash among the SAP customers”.

This is not something SAP needs right now. Whether this is a spoiler for SAP's proposed Sybase acquisition is unclear given that Versata has already won a court battle for patent infringement that cost SAP $139 million. If the EU determines that SAP has acted in the manner Versata claims then this has echoes back to the Microsoft anti-trust ruling. This is serious stuff.

SAP has a history of entering into agreements with third party vendors anxious to be aligned with the SAP brand and on the promise of access to a large potential customer pool only to find that they have inadvertently parted with IP. This fits well with the well known 'Not Invented Here' attitude that stymies innovation SAP could otherwise introduce. I've seen it in action and it's not pretty.

The question for today is whether this latest issue is a hangover from the past or whether it is a continuation of long term problems that SAP struggles to overcome.

The best evidence I can provide of what is happening comes from interactions with the company around the SAP certification debate. This is a topic with which I am intimately involved. The views of those who are attempting to move the needle are triggering searching questions internally at SAP along with vigorous debate about the next best steps. This is healthy. In the past, SAP would have smiled sweetly, thanked us for our efforts and done nothing. Today, I sense that SAP understands that its community has value beyond its ability to help customer find solutions to niggling problems.

On the other hand, I see ex-SAP VPs wondering whether these small but significant changes represent a genuine desire on the part of the company to operate outside its comfort zone. There is no question that the SAP community is a challenging environment. There are extremely smart people there who know their stuff and will not tolerate nonsense. So - if there is an 'issue' where does it reside?

The Not Invented Here mindset is not unique to SAP. I see this every day I challenge developer organizations about the extent to which they listen to customers. SAP is in the unique position of having created ann ecosystem that is highly transparent and from which it is hard to escape or paper over the cracks. For example. at last week's SAP Inside Track held at Newtown Square, ASUG and customer rep Tammy Powlas pulled no punches (login required) in asking why SAP certification for workflow has been withdrawn when a survey her group conducted shows there is a high level of demand. However, SAP has a special problem that needs resolving.

Many of the mid-tier managers have been in and around SAP/ABAP for decades. Their knowledge and understanding is better than any SI/VAR can hope to gain. That's why SAP can deploy SWAT teams from internal resources that can crush problems in difficult implementations. The flip side is that gives them power which, quite frankly, they're not averse to wielding in sometimes destructive ways. SAP C-suite people know this. As do those prepared to speak out.

My personal belief is that unless there is a significant attitude change, those people will be sidelined. In an email I received from a SAPper, my correspondent said that SAP will always act in the best interests of the company and that means keeping customers happy. As a broad statement of intent I have no doubt that is what the company believes. Now is the time to execute upon that and publicly demonstrate the veracity of those statements.

In other words, now is the time for SAP to disavow my colleagues who shake their heads in disbelief at the change that is not only coming but which will, if correctly executed, turn SAP into a best case example of a customer led company that delivers the value its customers crave. Anything less consigns SAP to the graveyard of IT history.

Of course some will think that being so intimately involved and ultimately invested that yours truly is looking at the world through rose colored spectacles. Come sit on my side of the fence and find out if that's true.

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