Many colleagues had been looking forward to hearing Lars Dalgaard articulate SAP's cloud story. [Disclosure: SAP asked myself and colleagues to critique an early cut of the cloud plan.] Most I know came away with puzzled looks. For myself I will say right off the bat: if there is a plan, it makes no sense to me at multiple levels. Reports confirm that SAP managed to deliver a confusing message compounded by public statements that are contradictory.
For example, Stuart Lauchalan at Business Cloud9 reported:
With all eyes on Lars Dalgaard’s maiden address as SAP’s new head of all things Cloud at Sapphire on Tuesday, co-CEO Bill McDermott’s let slip that the firm considered canning Business ByDesign.
What Lauchlan doesn't know and what McDermott didn't clarify is that those thoughts go back three years to a time when ByDesign was a mess. The Frontline goes further with the evocative and - quite frankly irresponsible headline: SAP finally admits Business ByDesign Defeat declaring:
SuccessFactors clearly stole the limelight at the event - even from SAP's baby of the moment, in-memory database Hana.
Whomever wrote this hasn't stayed on for the final day and has little clue what they're talking about. Even so, it is a measure of the sense of confusion that even the tiniest slip gets the peanut gallery up on its hind legs yelling foul when nothing of the sort has happened. More from the Frontline:
Perhaps even more interesting is that SAP is quickly dumping Business ByDesign set of applications for the newer model of SuccessFactors.
It was the SuccessFactors founder and chief executive Lars Dalgaard who broke the news.
"Business ByDesign was a beautiful vision but it was too big. Everyone does not want to put all their apps out in the cloud in one go. It was intimidating," he said.
While there may be truth in that statement, the author forgets that SAP reported 1,000 sales of BYD in 2011 from near nothing the year before. The go to market may need work but you cannot ignore the facts.
But that doesn't take away from the numerous messaging banana skins upon which SAP managed to slip on what should have been a crisp message. Even in private meetings with Jim Snabe, co-CEO SAP, the company admitted that the current cloud message was 'cloudy.'
During the public Q&A, Dalgaard did himself no favors by saying:
"The pricing of these applications is attractive and their availability is immediate," and "Brand doesn't matter," the latter statement being quickly clarified over Twitter to me by Dalgaard:
@dahowlett of course it matters and SAP has 1of the best - it just doesn't matter compared to customer execution and excitement - need focus
Even Zach Nelson, CEO NetSuite was able to poke fun at SAP's expense. From our own Phil Wainewright:
There was a great piece of theatre on stage at SuiteWorld in San Francisco this morning when NetSuite CEO Zach Nelson revealed that the company had signed an important new customer from the computing world: its archrival SAP. The software behemoth’s newly acquired subsidiary, SuccessFactors, remains a NetSuite customer, Nelson revealed: “They just renewed their license for NetSuite. I’m really pleased to welcome SAP as a customer.”
But it is in the product area that I believe SAP has made its biggest mistake. As I (along with colleagues) explained to SAP in the run up to SAPPHIRE Now, carving out financials from the BYD suite is both a defensive and non-differentiating play. Nobody needs a new GL, even if it is running in the cloud. SAP missed the opportunity to explain something that it does best: develop against big problems like industry specific billing or moving forward in industry specific needs such as claims management for insurance. This was something I broached with Jim Snabe, co-CEO SAP. He said that the company's initial cloud plan to compete along lines of business is very much a step one, suggesting the company will tackle bigger problems at step two.
I'll buy that but that was not what was said during the keynote or afterwards in a testing Q&A with Dalgaard that over ran by some 10 minutes.
At the post Day 2 parties, person after person approached me asking what the heck is going on. The way I described it was to fire up my phone and show them the device clock - only in Dalgaard's reality, what might be 9pm is in fact 9am. In other words, the messaging is often diametrically opposed to the words spoken in the public domain. Dalgaard dismisses these issues by saying that he's not a fan of PR. Neither am I. But in a world where perception is reality, SAP is about to get a reality check.
What you say matters. If it is wrong then you need to clarify. If it continues to be wrong then the PR trainers are going to be kept fully employed.
For myself, I am making no immediate judgments in the public domain. Today, I have a meeting with Dalgaard during which I hope we will get sense rather than misdirected headline one liners. It might be OK in the maelstrom of Silicon Valley fueled testosterone to make daft statements. It may well be that the disruptive message is one that SAP needs. But confusing and chaotic messaging to the global 2000 that runs its business on SAP is not a story that sits well.
This post will be updated with video once it is uploaded - updated.
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