I have to admit that I enjoy going to conferences and summits as an analyst, journalist or paid speaker. I'm treated well by the vendors who bring me, my expenses are covered (and if a speaker, a fee too of course) and I know a lot of the staff who of whichever vendor it is and I have a lot of friends among them. Plus, I get to see my other friends in the analyst world at most of them so I see them a fair amount.
Make no mistake about it. They are my actual friends in many cases, not just business acquaintances. So it becomes a pleasure to hang out with these good people.
The SAP Business Influencers Summit is no exception. It's fun to hang out and I do - and I am deluged with good food and drink.
But again, make no mistake about it. This doesn't buy vendors anything (and they don't expect that it does either) but a thank you for making the experience pleasant and fun.
So I'm going to lay out what I thought about SAP's announcements and presentations - and their upcoming direction as announced at this conference. Watch for the thanks part at the end.
There is one caveat. What I'm going to discuss is not about CRM but instead about their general direction and particularly their small and medium sized business offerings for 2010. These are areas I know a pretty substantial amount about but am not by any means the expert in. So this post might be under 3000 words. Ha.
SAP in General
SAP seems to be in the throes of a re-invention. One that they are calling "a Clear Path Forward." And, like any company in the throes of anything, its not clear or clean but there are some emergent patterns that can be pulled from the the swirling mass. Are these "things" encouraging? Yeah. Are they revolutionary? For SAP maybe. For the world's perception of SAP? Probably not, even if they pull them off. In reality? No. But they are interesting and if done well, and messaged appropriately might lead to some market gain this coming year. But what I'm suggesting is a tall order, given the chaos of the reinvention and what seems to be a puzzling message.The Content in the Broad Sense
Here's where we get to the 6.0 on a 10 meter part. Again, I was tracked through on an SME track so that's what I'm going to focus on along with the big picture.The two phrases that were heard all day yesterday were "innovation" and "end to end" Along with that theme was "Someday the three letter acronym will disappear" which is a. probably untrue and b. a little self-serving in that it dovetails with how SAP is attempting to re-invent themselves. They "don't want to be an ERP company anymore." In fact, are claiming that they aren't anymore and their approach at least bears that out. They are attempting to organize how they go to market around not even solutions but end to end processes such as "lead to cash." Viewing things that way, they think, aims squarely not at IT leadership but business management which is more interested in accomplishing business goals. However, I doubt that business leadership see their business problem as a specific process that needs to be engineered. I've never met one that thinks that way, in fact. However, "lead to cash" would encompass pieces from SAP CRM, SCM, maybe SRM, and order management, for example. In their new approach SAP has "modularized" everything so that you can cherry pick what you need to use from the SAP ecosystem.
This approach works well with the enterprise, but of course, if you look at the SME market, it doesn't necessarily fly. Interestingly, at least in how the SME market for SAP was presented, it was deeply product centric. They have 3 products for the SME market. They are Business One, SAP All in One, and Business by Design. I'll get into a brief discussion of each later but, while SAP was attempting to change their DNA, the old chromosomes reasserted themselves in the approach they took to the SME market place.
There were a couple of themes that emerged that were significant but on the other side of the coin, there were at least two that missing that were puzzling. Importantly, SAP has decided to to provide the means to do "real, real-time analyics" with unparalleled speeds by providing an "in memory model" for accessing, storing and compressing data. The basic idea is that columnar databases would operate in memory and hardware would operate in the cloud. This particular use of parallel and multi-core computing a.k.a. in memory computing, is designed to, at least theoretically provide the capability to get real time data do real time analysis of that data and provide real time data optimization. The demo of this capability was the demo of the same product shown at Sapphire - Business Objects Explorer. They showed 275 million rows of data organized, analyzed and reported on in less than two seconds. Impressive - as it was at Sapphire. This is sometime that is as Ventana Research points out in their discussion of the conference "a direct competitive poke at Oracle and IBM." I don't want to pretend to fully understand the ramifications of this highly technical area, not being savvy enough or ubergeeky enough, but the ability to access data in an organized fashion in "real real-time" is important in a large scale competitive environment, Very important. There is a fascinating discussion of it going on with the Enterprise Irregulars but it isn't public that I know of so I'm not going to reproduce it here. Suffice to say, even though I am one, they are much more conversant in these areas then I am.
Here's a video describing it so that it makes sense to people like me. (Thank you for this, Zoli Erdos)
On another matter, reading in between the lines, which is what I like doing frankly, there was one emergent theme that was clearly both promising and yet, had a puzzling twist at the same time. That was SAP's religious and rightful conversion to the value of mobility when it comes to their future.
The thing about SAP that I've always liked - with one exception - is that even when they realize a trend a little late in the cycle, they are able to develop thanks to their incredibly deep and smart R&D efforts - and because of their finger on the pulse of the development community - and more recently on the pulse of their customers - highly capable products and services wrappers around those products in a relatively short time. Plus they are almost as good as Microsoft in using their partner networks to build out elements of their ecosystem that they don't build themselves. This is one place that they often shine.
With mobile applications, we saw many representations of mobile apps that were available now or would be sometime in 2010. For example, the quality of the dashboards for the iPhone apps for Business One were exceptional. (That would be the apps, I believed were developed by SAP Swiss partner Core Systems). But this is where the puzzling part comes in. There is no doubt in my mind that SAP is going to rapidly evolve as a leader in the mobile enterprise. They have a REST API, which as my mobile analyst goddess Sheryl Kingstone of Yankee Group always points out is mission critical for mobile app development, They have a partnership with Sybase for the Sybase iAnywhere which is a comprehensive, device-agnostic mobile management system. They've recently developed a partnership with Syclo (from what I hear) which seems to have a highly specialized mobile development platform that works best in vertical industries - though I haven't seen it yet. (I will). In other words they are putting together a strong mobile ecosystem for rapidly developing highly specialized "end to end" mobile applications and mobile versions of their products.
But that's also bringing up the puzzling part to me. I watched many mobile demos the entire summit and they were literally ALL iPhone apps. Yet, about 2 years ago and through last year and even with Sapphire earlier this year, it was the alliance they had with RIM was the alliance that transformed SAP. In fact, they trumpeted the Blackberry-focused salesforce automation mobile app as not only a helluvan app but, because RIM had built it for them, as a major triumph in how they've changed. Everyone from Leo Aptheker on down highlighted this at Sapphire.
Now, I didn't see a single discussion of the SFA application or the RIM alliance the entire time I was there. None. Zip. Nada. What happened to it? Why wasn't a Blackberry app shown to reinforce the alliance? Does it still exist? I presume it does so why the omission? It might not seem much but since SAP messaging is most frequently their issue, it does send a bad message to people like me. Was the very high profile alliance that sparked some cultural changes at SAP DOA now? I don't know the answer. Maybe there was a Blackberry app shown somewhere. ???????? is all I can say.
I doubt that their customers are sitting there wondering much about this though if they've been interested in the SFA application, they might wonder about its future viability.
To a lesser extent there was another puzzling, not lack, but reduced footprint at the Summit. Sapphire 2009 made a HUGE deal of Sustainability as an SAP theme for the coming era. While there was some discussion in the tracks of that re: energy, when the four themes of SAP's future emerged, they were focused on innovation in:
- The scalability of core businesses (including the speed of data analysis i.e. in memory computing)
- Extensibility of SAP technologies (Expansion packs v. all out upgrades)/Modularization of SAP components
- Helping to extend the customers reach (this was supposedly the "social" component - though that was vastly underepresented, though not ignored)
- Operating in the business network - which is how they can justify the idea of businesses purchasing the components of "lead to cash" type processes.
Sustainability was not discussed as a "trend" that they had decided to apply themselves to in 2009 - which was puzzling since it seemed in April 2009, it was "THE" trend that they applied themselves to. Why reduce the footprint? Its not made of carbon.
In other words, the consistency of the message which would allow the "clear path forward" wasn't there at any point in the conference, though I will say that some of what I saw was encouraging and since I certainly would rather see them succeed than fail I was pleased by the quality of some of their applications and services that weren't around CRM.
Summation of the Big Picture
I think that all in all, what I'm seeing is a reinvention of SAP that is actually a reinvention of SAP as opposed to a marketing ploy. However, it is creating problems for their messaging. In fact, as Esteban Kolsky pointed out in his (always incredibly insightful) discussion of the Summit, SAP always shows a lot less than they actually have, which I think, once again they've done when it comes to their general messaging for this. While the presentation of Jonathan Becher was certainly ably done, the message was confusing if looking for some consistency across 2009. There is a lot to laud about what SAP does and is doing. Their responsiveness to their customers and their invitation to their customers to collaborate with them is second to none really. The problem is that over many years they have been consistent about their messaging - its not very good. Even if they are in the throes of a re-invention for the good, and they are willing to acknowledge some of their shortcomings, which they are, they still need to be a clear and concise factor in the market or customers aren't going to be very responsive. The market isn't going to wait for them to clear up the shortcomings or inconsistencies.The SME Universe
Okay, just for level-setting. The SAP definition of SME is NOT the definition that most people, companies or the SBA use. For example, they had a SME customer panel which included a company with 5000 employees, who's small business claim was that the 5000 employees were scattered at 30 companies - or something like that. Sorry. Not small business. Unless 5000mg of monsodium glutamate is an ingestible amount.That said, they presented three products which you'll see a brief take of mine on as we move through them:
- Business One - This is a traditional small business focused on premise product with no real social functionality but pretty much all that you are going to need for a "large small" to a mid-sized business. What makes this interesting is that there is a product developed by SAP Partner Core Systems, which I got wind of the night before at an SME dinner, that takes the on premise Business One app and builds private cloud services for it that can be purchased through an "appstore" like entity. This allows for significant extensibility of something that at its core is not that customizable nor does it have to be. A great idea. The demo of this capability was not very good but I got to see the iPhone app from Core Systems for both the services and the core functionality and it was well executed. I'm not aware of the pricing for this so I can't speak to it. I'll find out. All in all with Core Systems this becomes an interesting option for growth driven businesses. Its available now and the Core Systems functionality and mobile app are also I believe.
- Business All In One - Once again on premise. This product showed some exciting possibilities as a highly flexible, socially driven application for the mid-market with integrated Twitter feeds and external social network integration. Probably the most cutting edge and exciting for an on premise app for this space I've seen for awhile. However, when Michael Krigsman, blogger and influencer extraordinaire raised the "when is it going to be released" the answer was sadly like what I keep hearing about the next product Business By Design - 2010, Q3, Q4....maybe Q5...QInfinity. That doesn't work. They need to stop blurring the lines between the concept car and the car that we buy now. If Michael Krigsman hadn't asked the question, the assumption could have easily been that this lovely product was available now - not at a rather distant future. However, the promise of this product gives me a good feeling about SAP's potential in the SME market - at least their version of it.
- Business By Design - SAP is banking a lot on this - especially given their increased emphasis on the cloud and "hybrid" solutions that live on premise and in the cloud. Other than the interface which as Ray Wang tweeted a reminder of 1995 (I agree with Ray) it is a functionally viable on demand service but it is saddled with one great problem. It hasn't been released - and I'll be a skeptic until it is. I have no doubts about the functionality that SAP can bring. It will compete with anyone's. But I've heard that this is going to be released for a long time and while they claim a hundred customers, it still is in beta. Companies like salesforce.com, Oracle and Microsoft, and NetSuite are already there and eating up that market. When they finally release it, it may be too late unless they move pretty quickly. They are waiting for a low TCO and they claim that they've squeezed down the TCO by a factor of 20X. How? I don't know. That number seems awfully grand. Again, the functionality of BBD is competitive with anyone. But release it already.
In Sum - The Clear Path Not So Clear
Its not often that I'm not that sure what to think but this might be one of those times. On the one hand, SAP has the R&D chops with their Labs, and the reach to have a huge impact over the next two or three years and might even propel themselves into a market leading position. On the other, their messaging is so confused and so hard to see any consistency with especially between the lines that I'm not sure what the future holds. They have the quality of applications from the standpoint of their functionality; they understand the social customer is the customer of the present, not the future; they have almost great but not quite CRM 7 product that wasn't even mentioned at the Summit; their in memory model has a lot of promise to deliver the datacrunching speeds that can revolutionize how companies deal with customers; their small business products are actually competitive, even the on premise ones. That's to the good. But the reinvention at this point is still chaotic enough to make it unclear as to what they are truly aiming to do - especially given the messages from Sapphire not too many months ago. I can wait for SAP to clarify their thinking because transformation on this scale to "not-ERP" takes time. But the market won't wait.A Final Thanks
The event's organizers, who I always marvel over, did a great job given that there were 275 influencers from around the entire world who were from all ends of the influence spectrum. There were journalists too. They also had to deal with a conference being run at the same time on the other side of town by Sapience called popularly (though not by Sapience) the anti-SAP summit. That one was highlighted by a bakeoff between NetSuite and Business by Design that was being done at the "other" conference today. I'll try to get results and let you know what happened. UPDATE: NetSuite apparently won. Check in at some point with Dennis Howlett on that.In any case, this event rested particularly on the shoulders of SAP's Business Influencers Group (SAP BIG) who did a great job as always. Which means thank you and a shout out to Don Bulmer, Peter Auditore, Carly Cooper and from the analyst relations group Kate McNeel and from the BIG who wasn't there, Margot Heiligman. I think you all did a great job. All of you are invited over for a party at my house or individually when you're in the DC area. Seriously. You are fine human beings and you did a great job.
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