Jim Hagemann Snabe on SAP's hybrid approach and the search for "visible joy"
SAP is now in a "transformational phase", according to its co-CEO Jim Hagemann Snabe - and the company is looking to the likes of Apple and gaming companies as models for its software.
Speaking at the UK & Ireland SAP user conference in Manchester this week, Snabe said SAP is aiming to make its products "simple, viral, user-friendly".
"This is this new world of people collaborating and ecosystem innovation which I think took most people by surprise," he said. "If you look at Apple they have not only managed to redefine the computer and the device, they've actually redefined a bunch of industries... because of the technology and ease of consumption that they have managed to get to their customers, the consumers."
Snabe added: "If I look at how my kids are consuming software, if it's not desirable immediately, they throw it away. Can you imagine what happens to your IT landscape when these people come into business? I don't know how you want to keep your IT strategy going so we'd better make our software delightful as well."
The SAP co-CEO told the conference that he had also been inspired by a visit to games developer EA Games.
"They have one rule - if they don't see visible joy in seven minutes the game will be a flop, so I told that to our developers: visible joy in seven minutes. We're still working on that. That obviously does matter a lot and we are doing a lot [around that]".
Snabe, along with Bill McDermott, became co-CEOs of SAP in February this year following the resignation of the then CEO Léo Apotheker.
During Apotheker's time in charge SAP had seen a drop in software revenue, undergone delays to the development of its on-demand ERP product, Business ByDesign, and faced discontent over plans to move all customers to a more expensive support plan.
According to Snabe, he and fellow CEO McDermott reviewed SAP's direction immediately after taking the helm.
"The first thing we did in February was to try and...
...take a step back and say what is SAP? Why do we have SAP? What is our purpose?" he said.
"When you [change CEOs] like that, a door of opportunity opens and there is, in particular, an opportunity as new co-CEOs to try and articulate the strategy and be clearer about where we want to be and also more focused and fast in trying to get there," Snabe added.
The new leadership team concluded that SAP should pursue a "hybrid" approach for its product strategy, where on-premise, on-demand and mobile technology all play a part and customers are able to integrate their preferred mix of the three.
While the uptake of cloud services - and the hype around them - continues to grow, CIOs' concerns over where core data is stored and its security remain, leaving businesses often reluctant to put business-critical data and services in the cloud.
"It's not that companies want desperately to consume software over the internet - that in itself has a lot of challenges around security and so on... This notion about consuming software as a service over the internet is an appealing idea. It does make sense. But it only makes sense probably for those processes that are not core and differentiating to your business, so it's actually a hybrid approach that you need," Snabe said.
"Would you share your core process and your core data with someone else? You probably wouldn't. Data? Never. Process? Yes, if it's not differentiating."
SAP has historically focused on-premise technology and has been slow to move towards introducing software as a service. Its most notable foray into cloud software has been its Business ByDesign on-demand ERP technology, launched in July.
Snabe told the conference that an on-demand sales product will be added to SAP's portfolio during the first quarter of 2011 and customers will also "see more and more...
...mobile experiences coming out as part of the Business Suite, as part of Business ByDesign, as part of the line of business on-demand solutions", he told the conference.
After buying Sybase for $5.8bn in May this year, Snabe said the company is integrating the acquired technology to revamp the front end of its mobile offerings. He added that SAP plans to provide a software development kit for customers to customise their mobile technology using the SAP platform.
"We would very much like to become the business mobile company in this world where today the mobile world is about consumers.
"I frankly don't believe the world will be much more productive because we can consume videos and have Facebook on the mobile. I do believe however that if we could make business transactions happen on mobile devices and people get the right information at the right moment in time and can collaborate to do their job better, you will see a change, an improvement, in this world," he said.
Another key area in SAP's hybrid strategy is the "orchestration" technology that SAP is developing to integrate and manage these three technology areas and to make sure data between applications and processes remains consistent.
"We are committed to building our own pieces in such a way that they always fit together. Whether they were built on-premise, on-demand or for on-device consumption, they are designed to fit together," he said, adding: "We don't assume everything is SAP so we will have orchestration tools... so that you can have your end-to-end business running in a consistent way leveraging SAP, where that is relevant, and non-SAP where it's relevant," he added.
While SAP may be adopting a new hybrid strategy, it has no intention of pursuing the development of a full chip-to-application technology stack like Oracle, which Snabe said ties organisations to particular hardware rather than allowing for flexibility.
"We actually believe it's a fundamentally the wrong strategy. We have no interest in being part of that old world," he said.