Can SAP see the win-win-win pot of gold that is Sybase?

Day 2 of SAPPHIRE Now and nary a product announcement in sight. ZDNet'er Larry Dignan emerged from the keynote hall less than impressed at the lack of hard news. We spoke in SAP's Bloggers' Corner and Larry asked: 'Where's the news?' He was not alone. Some of the technology analysts were left scratching their heads. I disagree with those assessments.

SAP had plenty to say but almost none of it was about:

• Chest beting
• How awful the competition is
• How they are delivering wonderful value

Instead, SAP embarked on a somewhat over produced and slightly unreal attempt at the kind of Letterman Q&A you expect of rock stars but without the rock stars. Yet within the first few minutes of opening, co-CEO Bill McDermott was talking about customer success and the need for information 'in the moment.'

See also: SAP, Sybase go mobile app happy, enterprise style It’s good to be the King, er Software Developer

The showcase study came from a pre-recorded Avon testimonial, which curiously enough is also a Salesforce.com customer. Avon is as big a brand as you're likely to get and one with which all customers can identify. Talking transformation around an old brand was heartening for the kinds of customer SAP attracts. For making that effort, SAP marketing should be rightly proud. This goes a lot further.

For too long, SAP, along with all (but one) of its competitors have treated SAPPHIRE as an exercise in self aggrandisement. It left the impression that the company is plotting a different course. SAP has always known that customers pay the bills and likes to believe it has a passion for customer success even though there are many documented instances of failure. Anyone remember former Leo Apothoker's 'shoddy consultants' outburst?

From a show standpoint, if that was all there is to it then I would have been sorely disappointed. Instead and for the first time, SAP scheduled colleagues and I with at least 50% customer meet and greets. OK - so they're self selecting but all of those meetings are un-chaperoned. No PR/AR minders in sight. That means we get unfiltered conversations with customers living with SAP solutions. The conversations are lively, the insights valuable. The risk to SAP is obvious.

In contrast, the media Q&A concentrated upon Wall Street questions with little of substance that recognised the value of the customer or the company's opportunity to develop truly ground breaking business models. I made the mistake of asking a badly worded question that left the co-CEO's a tad bemused but which I believe addresses a major hole in SAP's long term strategy.

Many of my closest colleagues believe SAP is conflicted. On the one hand it has a track record of success for what it does that is second to none. On the other hand it is striving to remain relevant in a world dominated by Google, Facebook and Apple. SAP can learn from these players. Here's how it goes.

SAP's Sybase acquisition has the potential to become a huge pot of gold where everyone's a winner. It has a mobile story that is attractive if problematic from a developer's perspective. More on that tomorrow once we get into the nuts and bolts.

Right now it is offering the Sybase platforms as on-premise, hosted or on-demand. When Sybase chief John Chen confirmed that in the Q&A , there was a collective sigh of 'so what?' Pricing is all over the map.

I ran some 'back of fag packet' numbers that suggest even if SAP is 100% successful in selling the Sybase PaaS, the revenue it derives will pale into insignificance compared to operating the equivalent of an Apple AppStore. It would need to largely ditch its addiction to $1+ million deals in favor of business apps priced at $2-5 per user per month. Based upon another back of fag packet estimate of total user numbers in the SAP universe plus the number of SAP developed mobile apps I saw on the show floor, SAP could blow the on-premise model to pieces and still come out ahead.

The demand is there - the mobile part of the show was packed. I've seen some great examples of apps that could easily work at AppStore pricing. I could be 95% adrift in my calculations and still beat the on-premise model. When you look at what Apple is doing and then apply the same basic thinking to SAP, the numbers explode. Here's the kicker.

In order to make this succeed, SAP would largely need to abandon the idea of selling the platform as its first priority except under specific circumstances for specific types of customer. This was the question to which I wanted an answer but mangled in the Q&A, much to the delight of colleagues.

Later in the day, I met with Bill McDermott, co-CEO and showed him my 'back of fag packet' calcs. His response? "I like your math. I think I'll take this one under advisement."

Far be it of me to try set any business strategy on an unsolicited basis for any vendor. Like anyone pontificating upon numbers I have limited insight and could be wildly wrong. But when you look at the enterprise world through the Apple/Google/Amazon lens then you get a very different result from the math that dictates on-premise economics.

SAP users and customers are looking for transformational benefit. There are ongoing conversations with the user groups about license value. As I headed into our metting with McDermott, the head of the German user group was muttering about the same licensing issues as ASUG. My argument dispenses with that discussion and still leaves everyone happy.

SAP has the technical assets and smarts to deliver in this one platform play. It would be attractive to any developer and democratizes the idea of building for the SAP ecosystem. The question in my mind is whether the company can see that for what it means.