The enterprise software ecosystem has been taken a few hits due to partners running the implementation asylum, inefficiencies and a lack of innovation. That reality has enabled smaller vendors to thrive and the cloud to surface as a much better option.
That high-level takeaway is the glue that holds Vinnie Mirchandani's SAP Nation book together. The book, a must read for those following enterprise software as a buyer, seller or trend tracker, boils down in part to this:
- SAP's economy may be around $200 billion and $1 trillion since the last recession;
- SAP lost control of partners and integrators and became too far removed from the customer;
- The labor costs surrounding SAP implementations are enormous and represent 70 percent of the vendor's economy;
- Cloud vendors and smaller ERP players are thriving as customers de-emphasize SAP;
- SAP has highlights, but is chasing a platform play that may not pan out.
Mirchandani's well-researched book has a bevy of case studies to back up how customers are dealing with SAP.
As I read through SAP Nation
, I couldn't help but substitute SAP for Oracle in my head. Or IBM. Or HP. Or Cisco. Or any other large enterprise vendor. The reality is that implementations in the enterprise became too complicated and vendors inserted too many layers between them and the customer. Mirchandani noted that costs surrounding SAP are well above rivals such as Oracle, which has automated database deployments to a large degree and is a smaller applications player. Yes, SAP may be an extreme example, but it's still safe to say that simplicity and enterprise technology aren't exactly synonyms.
Mirchandani's book also highlights players such as Plex and Workday as options to SAP. Enterprises are betting on smaller players because they can have more of a collaborative implementation, consultants aren't involved and there's a real partnership to innovate. In addition, enterprises are big customers of these smaller vendors and have more clout than they would with SAP and Oracle. The cloud has also transformed implementations for the better.
But I can see a day where Mirchandani will have his share of sequels to SAP Nation. The challenge for enterprise technology vendors is to guard against what happened to the SAP ecosystem. A bigger challenge: Players in the SAP ecosystem--namely integrators--are now moving to other ecosystems to grow. It's possible that these SAP refugees replicate bad habits.
In other words, what's simple today may not be tomorrow. Salesforce Nation is sure getting complicated. Those implementations increasingly depend on integrators. Customization and APIs are flying all over the place and naturally instance sprawl is a problem in the enterprise. Workday needs integrators to grow because it can't keep up with demand. Amazon Web Services is seeing managed service providers emerge because enterprises wrongly think they can flip a switch, skip the optimization and then are shocked with their first bill.
It's not a stretch to realize that as cloud vendors grow the ecosystems around them will also balloon and if someone isn't hell-bent on simplicity you'll get inefficient implementations in a hurry. The challenge for cloud vendors will be to stay near the customer. Maybe the cloud delivery model helps a bit, but I'm willing to bet that we'll be charting a few next-gen implementation hiccups ahead.
The real message with SAP Nation is that your friendly neighborhood tech vendor wants to scale and become massive. That scale doesn't necessarily help you as an IT buyer. As a buyer, you're left with staying the course because it's familiar or bailing when a vendor reaches a certain size because you've seen this movie before. In that context, Mirchandani's SAP Nation is a history lesson as well as a movie preview for future years in the enterprise space.
ZDNet's Monday Morning Opener is our opening salvo for the week in tech. As a global site, this editorial publishes on Monday at 8am AEST in Sydney, Australia, which is 6pm Eastern Time on Sunday in the US. It is written by a member of ZDNet's global editorial board, which is comprised of our lead editors across Asia, Australia, Europe, and the US.
Previously on Monday Morning Opener: