Ringing in a belated New Year with SAP, Oracle, and the CRM Watchlist 2019

I promised that I would cover my speculations about Oracle and SAP, and to fulfill my obligations for 2017, here they are -- in 2018. The best way to put it is, when it comes to both Oracle and SAP, I'm very cautiously optimistic for very different reasons. But caution rules the day, and these are speculations, not deep analysis. More of that later. For now, read it, and tell me why you weep or laugh or nod.
Written by Paul Greenberg, Contributor

Video: The cloud is getting smarter: Oracle's all in for AI

I didn't think it would take this long to start the year, but I am just getting past 12 days of the nastiest flu I ever had and that you definitely don't want. But, hey, I'm in better health and life continues, and I can't help but be excited now that I'm able to feel anything but sick!

Let's take a brief look at 2018 and what I'm going to be writing and thinking about as well as making a couple of observations (re: SAP and Oracle, since I gave you Salesforce and Microsoft already back in December).

There are many items of interest out there that I'm going to be spending time on in 2018. I'd love to call them trends, but I'm starting to realize forecasts are a joke. Remember when the world of transportation was going to be transformed by the Segway? Or that Hillary was a lock for the election? Or the New York Giants (my team) were going to win the division according to NFL punditry this year? Ha. So much for forecasting anything. Though, Yankees, World Series... maybe?

So, rather than stretch my limited abilities to predict any damned thing, let's just say that a lot of things are now very compelling matters of discussion. Some are even showing up as subjects of some importance to companies around the world. While many may be early stage, all have the potential to go somewhere. It's just a matter of whether they go up a ladder or down a rabbit hole. Here's what I'm going to be continuing coverage on and how I'm going to do that and what I'm adding to my existing arsenal this year. Plus, a couple of announcements concerning the CRM Watchlist and the Emergence Maturity Index. None of this is exhaustive at all, merely snippets of introduction to my year, and thus, what is likely to be my obsessions for this year. Welcome to my world. Sigh.

Read also: Oracle to market: We're Cloud 2.0

From the Observatory: SAP and Oracle

This isn't going to be exhaustive, because there are a lot of verdicts out on both companies now, but what is notable is that I'm curiously optimistic about both of them due to some people in place, things being done, and changes internally that are meaningful. That will mean if each of them follows through with the changes, they will be much more formidable, and I hope, much more competitive in the customer-facing technology world. But, in the short and long runs, that will be up to how they follow up some positive moves.


As you know, I've always seen SAP as a company with a huge amount of promise. It is one of these companies that I've always thought had (and has) real marketing leading potential for reasons including its level of innovation, the commitment of its customer base to them, its willingness internally to actually adopt principals that, depending on what circles you run in, can be called, co-creation with customers, service-dominant logic and/or service design and customer engagement via communities such as SDN and former SAPer Jim Goldfinger's customer community. It also has a very strong business influencer program recognizing not only independent analysts but academics -- and thus has had strong ties to, I think, around 900 academics (last I heard) who are able to enhance and support true thought leadership initiatives.

Read also: Microsoft and SAP both commit to running SAP HANA on Azure internally

It is also one of the companies that not only has made a public commitment to be a responsible steward on the Earth, but that actually places some muscle behind it. I remember at Sapphire a few years ago, it developed technology that would measure its (and anyone else's) carbon footprint, and it also as a company put in a series of sustainability measures that would ensure its commitment to a safer environment. I didn't love its messaging around it -- a little too business profitability-focused and less environmentally friendly -- but, hey, it did things to improve the environment and to improve the business climate and environment, too. Most recently, on Jan. 22, 2018, SAP, via Bill McDermott, pledged a two billion euro support for business investment in France to Prime Minister Emmanuel Macron. It actually does things to support the world, not just talk.

But it has a serious downside that has been a constant, frustrating brake on its impact in the market. To illustrate, in 2007, I wrote a post entitled, SAP, amazing, but you'd never know it and that's sad. Then, in 2015, I wrote a post entitled, SAP, amazeballs, but you'd never know it and that's sad. The main point then (from the latter post) and my point in 2018 is the same:

Back in 2007, when I still had imagination and literary skills, I wrote this blog post entitled "SAP, Amazing But You'd Never Know It And That's Sad." Other than the words "SAPPHIRE 2015" and the tilt of the head to a more contemporary pop expression for "amazing", the headline is the same in 2015. Amazing or Amazeballs, depending on which year from 2007-2015 you choose to read this headline. But you'd never know it. Nor does anyone else. Which is très, très sad. Because this is a company with limitless ceiling if it could just figure out how to be less socially awkward.

But despite all that unrealized potential, it does accomplish a lot, perhaps a bit too quietly, but still, there are things that can be and are meaningful. Aside from its environmentally responsible and socially responsible actions as a company, it has also tried to publicly turn the perception of the company around and has been trying since 2015. The fanfare around its declaration of the SAP Hybris simplified front office on Sep. 16, 2015 was, on the one hand, indicative of the power and importance of its actual pivot to the front office (and its integration with the back office). But, on the other hand, it reflected its missteps in how it declaims to the public with a release date in the middle of Salesforce's Dreamforce 2015 -- and thus no real press on something of paramount importance to the company. It's fanfare via trumpets sounding with tissue plugging up the horn.

Nonetheless, from 2015 on, to its credit, SAP has embraced digital transformation, customer engagement, and has attempted to reposition around the front office/back office integration from the technology side with some serious efforts on UI/UX (Fiori, etc). I'm not forgiving its flaws at all, but I am saying it has been somewhat successful in its pivoting -- whether you know that -- which is, of course, one of the biggest problems it has now.

Its downside, getting in its own way -- via poor messaging and poor presentation of its messaging, -- tends to undercut its otherwise excellent capabilities as a company. It just doesn't know how to send the signals it needs to -- to the public it serves. That is what kills SAP every time. Its corporate narrative is broken and that hurts it. It needs to be fixed in 2018 for it to realize the promise that has been bubbling just under the surface for years. Don't get me wrong. SAP is a significant player on the world stage and an accomplished company. So, it shouldn't be, and I hope won't be, underestimated. Among its many strengths -- strong channel, strong developer network, internally often brilliant innovations, some products like Jam being the best in class, some very smart people, and an outlook that drives customer-company partnerships -- it has one other strength that often gets overlooked: It has a well-thought out, highly intelligent acquisition strategy. When it boils down to it, it has made among the smartest moves it could have with major and some of its minor acquisitions over the years.

These are the major acquisitions SAP made in the last decade (including the intent to acquire Callidus Cloud as of Jan. 30 for $2.4 billion). I'm going to elaborate on Callidus Cloud a bit when I get to them.

  1. Business Objects (2007) ($6.78 billion): Arguably (I guess it could be arguable, but, at least, I believe this) the best analytics platform in the world at the time of acquisition -- and one that its managed to build on and evolve since that time.
  2. Successfactors (2011) ($3.4 billion): Despite the cloud-based HR firm leaking money at the time it was acquired, it can be argued that it drove (accelerated) SAP's transition to the cloud -- and without that acquisition, it is highly unlikely that SAP would be as far in that direction as it is now.
  3. Ariba (2012) ($4.3 billion): Admittedly, I don't have a great handle on this one. It wasn't truly in my wheelhouse. But I spoke with a couple of people I trust who were involved with this -- and their consensus unequivocally is that this was a good one. Again, I don't directly know.
  4. Hybris (2013) (estimated $1 billion): A no-brainer. The best e-commerce platform on the market prior to and post-acquisition. Bar none.
  5. Concur (2014) ($8.3 billion): The leader in expense management. Industrial strength. Well recognized. Impact on both front and back office. Still, might have overpaid for this one.
  6. Gigya (2017) ($350 million): 1.2 billion (that would be 1/6 of the entire Earth's population) verified digital identities. For purposes of accurate data, personalization, and, of course, identity management, there is no company on Earth that is better suited than Gigya. I've known it and its CEO for many years, and this acquisition not only fits well into the ecosystem and platform strategy that SAP engenders, but at the same time, stands on its own merits as a superb company with a great product and market leadership in its space. A bargain at the price, too.
  7. Callidus Cloud (2018) ($2.4 billion): Jan. 30, 2018 intent to acquire announced. Callidus Cloud is a unique company. I have been its adviser for nearly four years and have had a deep look at what it does and how it works. Its focus is the end-to-end process it calls "Lead-to-Money," which implies core CRM functionality (minus customer service). The reality is that it has no core CRM capability built into its offering. What it does have is what it labels "sales performance management," but it is really augmented capabilities for a sales and marketing ecosystem. For example, it offers sales onboarding via Litmos (its learning management system), CPQ, sales compensation (e.g. commissions) gamification, analytics. etc. Also, a number of smaller or "other" capabilities such as dealer specific applications. Effectively, it filels the holes in a traditional sales and marketing ecosystem, and with the strength of its e-learning platform, it can branch to a number of other things. The other thing that Callidus Cloud has going for it is a strong management team led by CEO Leslie Stretch, Chief Product Officer Giles House, and practice jefes like EVP Rory Cameron, who runs the Litmos product. This is a great acquisition but would have been a great one if made by Salesforce or Microsoft or Oracle, too, though SAP likely makes the best partner for it. It also holds a strong position in the mid-market, and yet, either it already scalable or, where it is not, has the architecture to be made scalable to the enterprise if need be -- and it will need to be. This works for both companies, which is, at least at this point, the best result you can hope for.

The latter two acquisitions -- Gigya in late 2017 and Callidus Cloud in the works this week -- might be two of the best acquisitions that anyone made anywhere in the past couple of years. It also shows that despite the ill timing of the "we are customer centric" announcement in 2015, it is attempting to align itself with the idea. That means moving away from its back-office heritage (though not drop it) and reposition as an empathetic, socially aware, and customer-focused company with the ecosystem to support and enable that. Note, I said trying. As you can guess by what I've already written, it is not done yet.

Read also: Government-wide SAP deal expected to save IT coin

There are uncertainties -- but the kind of uncertainties that give rise to some hope, too. As of this year, SAP Hybris also has a new president, Alex Atzberger, formerly of SAP Ariba, who, while I have yet to meet him, I've heard good things about so far. So, welcome 2018. This might be the year that SAP not only does amazing/amazeballs things, but actually, finally, you'll know about it. I hope so.


I need to start this part of my brief opening year review of Oracle with you leaving these pages and going off to read something someone else wrote about Oracle. You can come back after you finish it. It was written by Diginomica pundit, Phil Wainewright in mid-January, and it is entitled: How the XaaS Effect is Transforming Oracle's Culture. To summarize this rather brilliant, spot-on piece, Phil outlines XaaS, which is "everything as a service" -- something that I've been watching for awhile, seeing companies like Oracle providing infrastructure-, platform-, software-as-a-service (IaaS, PaaS, and, of course, SaaS, in that order). But what Phil so importantly outlines is none of that -- but this, and I quote:

The common theme across all these varieties of XaaS is that, instead of simply shipping a product, the vendor is engaged in enabling an outcome and that 'XaaS effect' has a profound impact on the whole organization.

Read also: Meltdown-Spectre: Oracle's critical patch update offers fixes against CPU attacks

If you're between 21 and 45, boom. Mic drop. If you're over 55, bingo! If you're between 46 and 54, I can't help you, sorry. But all in all, this is one of the more important revelations about how to conduct business in the 21st century. Sales, marketing, customer service all need to be outcomes-based. If you are a tech vendor, particularly, if you aren't "selling" your tech that way, you will ultimately fail -- and I'm willing to stand behind that as a blanket statement. I have been a firm supporter of this approach. Here is a sneak peek at a couple of paragraphs (presuming it makes the edit) from my new book on customer engagement due out in August from Harvard Business Press:

"...Like all other human beings, your customers or prospects, need to see how the products and services you provide are going to help them achieve the outcomes that are relevant to them. To that end, one of the smartest efforts at product marketing I've ever seen was done in its earlier days by the sales optimization business software company, Lattice Engines. Their customer testimonials weren't just here is how it benefited their customer companies, but testimonials from individuals on how they got promoted because of their success with Lattice Engines. The sales approach means show the customer how it gets the outcomes that benefit the business and the individual buyer.

The value of outcomes-based selling goes to the heart of self-interest. I want to know what it is you can enable that gets me to these places I need to be so that I can achieve my goal -- and thus, benefit the company I work for. But it's not just the sales and/or marketing people selling enablement -- its product design teams working to create a product that helps achieve the outcome. It's the approach that service design people call value in use. The oldest cliché around it is that you aren't looking to purchase a screwdriver, but you are looking to purchase something that can help you put together a cabinet. Think about it, though. If that is the case, it might need one kind of screwdriver, but if you are tightening a computer motherboard screw, it might be an Allen wrench instead of a screwdriver. Each of them supports an outcome that has a different result and different approach - and the sales team and the product development teams should know what that projected outcome is supposed to be to create the appropriate products or provide the appropriate services that will solve the problem or enable the outcome."

Here's how Phil defines that outcomes-based transformation that Oracle is undergoing, based on an Oracle CX analyst summit presentation by EVP Doug Kehring, chief of staff and head of corporate development:

"Its tempting to image that once the technology is in place, the job is done. But that's just the starting point. The technology fuels new engagement models, delivery models and business models, but these won't crystallize unless the people and the organization are ready to deliver them."

OK, I'm going to leave you to go read the rest of Phil's cogent analysis and his description of Oracle's self-analysis. I'll take it from there once you get back.

You back now? Read up? Good. Let's proceed.

Oracle has had an historically difficult culture -- one that has been hard to work with for its own employees, customers, analysts, and its partners for years. I've had 20 years of direct experience with that difficulty in various roles, with Oracle starting with overseeing building an Oracle practice (among multiple practices I oversaw e.g., PeopleSoft, SAP, and Lotus Notes, etc) to my work with the company as an analyst who wasn't tied to Gartner and Forrester.

Even with those difficulties and frustrations, there were two things that Oracle had that no one could deny:

First, it had a very strong, capable, and versatile group in middle and upper middle management. These are people who get things done -- and done well. People like Steve Fioretti, VP of product management at Oracle Service Cloud; Letty Ledbetter, (until her very recent departure) VP of global product and services public relations at Oracle; Brian Curran, VP of customer experience strategy and design, in charge of its entire customer experience strategy and customer journey planning efforts; Tara Roberts, VP of adaptive intelligence solutions, who you can count to finish what she is responsible for in a timely and invaluable way (e.g., she drove development of the Social Cloud); and, of course, the incredibly accomplished Melissa Boxer, VP of CRM product management and product strategy. Thus, its CX portfolio, which I still think is poorly positioned, is nonetheless a solid, strong product portfolio that competed with anyone's in the market. Its Service Cloud, Marketing Cloud nee Eloqua, and the mobile side of its Sales Cloud are powerful offerings. Its AI solutions/products, built by Melissa Boxer and managed by Jack Berkowitz, VP of products and data science at Oracle Adaptive Intelligence, is very different in concept and approach than, say, how Salesforce treats Artificial Intelligence (AI). Salesforce's Einstein is a layer of its platform. Oracle's Adaptive Intelligence applications are infusions into existing applications or combinations that lead to new applications -- but it is emphatically not a platform layer. But, regardless of different approach, its AI solutions are thoughtful additions to its existing solutions. While Oracle's approach has a unique signature, its customer-facing applications are market ready.

While my "evidence" is anecdotal, with Phil's post being most of my corroboration of at least Oracle being aware of its past cultural transgressions and making a serious attempt to transform its culture, I am excited for this long overdue shift. Its strengths in combination with the self-awareness and approach to changing the culture shows to me at least that it is making the attempt to be relevant and good players on the bigger stage. That said, I'm also a bit wary, because I am light on evidence. I can't say that I know enough to confirm what Doug Kehrig said about the cultural transformation Oracle is undergoing being widespread -- a crusade to gain a true foothold in what has been otherwise a difficult environment for years. But, if real, to Oracle's credit, it not only has admitted that it has been a culture that celebrated and supported saying "no" and now is trying to be a culture that asks, "How can I help?"

Read also: Amazon, Salesforce would love to move from Oracle databases, muzzle Ellison, but can they succeed?

If I take this at face and combine it with the positives that Oracle has always had, the powerful and highly capable people in the middle management of the company, it makes me somewhat optimistic that 2018 will be the year that CX -- customer experience -- will mean more than a badly positioned product portfolio. I honestly would love to see this happen. There are a lot of people at that company I respect, and it is a company that has clearly made a real impact over decades in the business world, and it has hundreds of thousands of customers who would be nothing more than thrilled to see Oracle more as a productive partner than as a vendor with its purchased software, and in return, got the software and baggage. I'll be monitoring this model and cultural transformation as the year goes on and keep you posted.

Now, a couple of brief announcements.


The CRM Watchlist 2019

On Feb. 7 or Feb. 8 , I will be announcing the newly revamped CRM Watchlist criteria and opening up the Watchlist for registration that day. Please note, there are not only new criteria for entering (still free of charge), but there are some revamped rules and dates that you have to be mindful of right now. There are some on-the-surface changes, but there is a lot of changes under the covers, making a victory more aligned to the world that we currently live than I had in the past. Be aware. Be very aware. And afraid. A little at least. Watch these pages on Feb. 7 or Feb. 8 for the details.

The 2019 Emergence Maturity Index (EMIs)

One of the big changes in the 2019 CRM Watchlist is that small companies that were very unlikely to have an impact are no longer part of the CRM Watchlist. Every year, about 40 percent to 55 percent of the companies that would enter would be so small and so young that its chances of winning the CRM Watchlist would be considered generous at zero percent. They had great products, but they typically weren't doing what you had to do to be a company that would have a true breakout impact. Once in awhile that existed, but rarely. That said, small companies are, well, evolving companies, and if they are growing and evolving by fleshing out the right strategies, programs, identifying its mission, clarifying its vision, investing in marketing and sales ops and customer service etc., then breakouts are always possible.

So, young company, stay tuned for Feb. 7 or Feb. 8, because the same day I announce the Watchlist criteria, I will be announcing the criteria for the Emergence Maturity Index (EMI) awards (the EMIs). That means the winners are those companies who I expect will break out within 12 months of contest. I'll leave it at that for now, but what it takes to be part of the EMIs (and also what the EMI is) will be explained in detail next week as will the dates for submission etc. If you want a prototype of what it is, read this post from last November.

There's so much more to talk about. Stay tuned. We're in for a wild and different kind of ride this year, though not entirely. I'll just leave you in suspense.

Previous and related coverage

Change agents aren't personas, they are human

This report is really interesting and potentially very valuable to those of you who have digital transformation efforts either underway or are contemplating some version of one.

Customer service done right: How a United Airlines crew rose above an imperfect storm

This was the imperfect storm of events when it comes to United Airlines. You won't believe it when you read it, but I swear it was true. But great customer service can beat any problem.

Where's the ROI in your CRM? It's in the process

CRM, if implemented properly, can be a company's competitive edge.

Editorial standards