SAP unites behind McDermott, HANA and new mantra

After three days preaching simplicity, it's a wrap for SAP Sapphire, although some cloud questions remain unanswered.
Written by Natalie Gagliordi, Contributor

SAP has no shortage of company outsiders questioning the legacy vendor's ability to adapt and innovate amidst the startup-fueled disruption that's taking place in the world of enterprise technology.

But if one thing is clear after attending the company's annual Sapphire Now conference in Orlando, Florida, SAP employees are rallying around its new "simplicity" mantra and the direction it's headed in the cloud. 

What's even more telling is how SAP appears to stand unified behind its new sole CEO Bill McDermott, especially following last month's news that more than 1,000 jobs would be axed as the company moves to become more of a cloud player.

The job cuts, coupled with executive level shakeups such as the exit of SAP's tech lead Vishal Sikka, make it easy to suspect that internally SAP is wobblier than it's letting on. The questions surrounding McDermott's effectiveness (can a sales guy successfully wrangle the German engineering crew?) and SAP's long-term mobile innovation strategy only heightened the skepticism toward the German company's first American leader.

But neither McDermott nor the sea of SAP employees attending Sapphire seemed fazed by the unspoken doubts. SAP's Kevin Gilroy, SVP and GM of Global Direct Channels and SMEs, gave me his take on the moving parts: 

"I think for my team the cloud is a huge enabler, so they are saying that now we have an opportunity to knock it out of the park — and they are jacked," Gilroy said. "For the broader SAP, Bill's leadership is so inspiring that the company is really rallying around this transformation of SAP. My sense is that the employee base is on board and that they believe in the strategy. I haven't seen a lot of people saying we should go back to the old way."

The strategy Gilroy is referring to is the focus on the cloud — particularly HANA — and the old way refers to the on-premise approach that ruled the roost before cloud operations took over.

The HANA platform had its own starring role at his year's Sapphire, (especially as the subject of SAP co-founder and current chairman Hasso Platner's keynote), along with Fiori, the now free and improved UX for SAP software.

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From left: Leukert, McDermott and finance head Luka Mucic

Plattner's plea for HANA adoption was echoed by applications-development veteran Bernd Leukert, who replaced Sikka in the top technology post. Leukert made the rounds at Sapphire, taking the lead at several Q&A sessions and press conferences. During one of those press conferences he summed up SAP's business proposition like this:

"In a nutshell, we give customers the opportunity to consolidate their fragmented landscape with HANA and give a consistent user experience with Fiori and we can enhance this all with applications that lead the move to the cloud." 

But Leukert also stressed that the customers would have the final say in when and if they make migration to the cloud.

"It doesn't mean that companies have to move, we continue to support the on-premise world."

McDermott made the same declaration, noting the inevitability of cloud holdouts who will continue to prefer the data centers and the on-premise approach.

"We have to accommodate them too," he said.

However one question that remains unanswered after Sapphire is how SAP plans to grow HANA and cloud subscriptions — a fete the company must achieve before the decline in application licensing has a chance to make a significant impact — while still courting the holdouts. 

But if McDermott has it his way, SAP will reign supreme while still offering the best of both worlds.

"In truth it's too complicated out there. CEOs are looking for simple solutions with a beautiful user experience," McDermott said. "We can be the market leading company for business software both in the cloud and on premise." 

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