Today, SAP formally unveils A1S, code name for SAP's attempt to reinvent itself as an SME-friendly company. More than that, A1S represents SAP's opportunity to compete against smaller, more nimble competitors such as Salesforce.com, Workday, and NetSuite. These companies pose a significant, long-term threat to SAP, even though SAP's core, big system business is not going away anytime soon.
Although SAP has been secretive about A1S, some tidbits have slipped out:
- User interface and software were designed to gain the all-important feel-good advantage (Wall Street Journal)
- Software customization is a thing of the past (ZDnet colleague and fellow Enterprise Irregular Dennis Howlett)
- Forty-five customers are currently working with A1S (Dennis Howlett)
Consulting is an important area of consideration for SAP in rolling out the new business model that must accompany A1S. As described by Dennis Howlett:
Embedded services like inbuilt training, e-learning and automated diagnostic data collection during usage will chop out cost bringing the ongoing SAP consulting gravy train to a grinding halt.
This is a big deal for SAP, since professional services generates almost 30% of SAP's annual revenue (Source: Association of Support Professionals, Maintenance & Services Ratios/2006). In addition, a large, well-established consulting ecosystem has been constructed around SAP. A1S forces a different consulting model, and SAP's ability to digest this change quickly remains to be seen.
We'll learn more just 30 minutes from now, when the A1S press conference begins. SAP's world is about to change...