SAPPHIRE day 1: the wrap

How was day one of SAPPHIRE 2010? Muted but more respectful of the customer than I have seen in a long time. Questions about Business ByDesign remain but there should be interesting announcements tomorrow.
Written by Dennis Howlett, Contributor

SAPPHIRE, SAP's annual customer conference is a completely different experience from past years. Gone are the one hour lectures made bearable by funky demos of things that may never happen. In come short, sharp pitches complemented by cross-continental Q&As. The overall effect is one where content starts out light but improves as the day goes on. Think wine maturing in the casket to be sipped at regular tasting intervals.

First up on the bloggers' packed agenda was an audience with Vishal Sikka, executive board member and CTO, SAP. A year ago, Vishal was a mumbling geek talking in a language only rocket scientists could understand. Today we saw a much more confident person explaining how his burgeoning development organization is responding to change, how they're working on creating an agile organization and what difference the Sybase acquisition brings to the table. (check the video at the top of this post.) Vishal is of the view that over time, there will be perhaps 5 million interface screens for SAP software, the bulk of which will be available for mobile devices. The company emphasizes the Sybase acquisition as a mobile play but in the halls, global account sales people see this as an entree to the financial services world. Best of both? We'll see once the transaction has closed and the two companies have six months under their belt.

At the beginning of the video, you'll hear him talking about how much it pains SAP to hear Vinnie Mirchandani's criticism of SAP innovation characterized as 'spraypainting' old software: "That shit hurts man, you shouldn't say things like that," he says.

Next up was Bill McDermott, Co-CEO SAP. (see above)

I've said before that he can make eskimoes glad they paid the premium for buying top of the line freezers. He's that good a salesperson. Today was no different except that he sounded sincere when he said that: "SAP can still expand margins by running lean...but we are not milking SAP customers for the margin." In discussing the competitive landscape, Bill said that, "Customers don't buy a stack because you've got a stack." It's a fair point. He also called upon bloggers and SAP Mentors to open and maintain a dialogue with the CEO's office on agreed issues of mutual importance. Top of mind for some of us is the issue of making SAP Certification a value differentiator.

Finally, we had an intense discussion with Doug Merritt, EVP OnDemand and Business ByDesign. Doug is really the sales guy but he has a sizable and challenging portfolio. During the conversation he said the company has developed starter packs that allow customers to buy by function at price points yet to be determined. Customers can also buy the suite for a minimum of 10-users. This is a huge departure from all previous statements by SAP and is perhaps a recognition that the market at 25 users and up requires a lot more than the as yet partly baked go to market strategy.

I remain concerned that SAP has not figured out how to get BYD to market in a way that will allow rapid growth. However, in the morning session, Jim Snabe, Co-CEO snuffed out one potential snafu. During the morning Q&A he made the point that SAP is not going to talk about BYD revenues but concentrate on numbers of customers. This will not please Wall Street but makes life easier for SAP as it attempts to ramp this line of business.

Conclusion - SAP comes out of day one honors even. It didn't deliver the kind of 'shock and awe' announcements I would have liked to see other than a muted reference to BYD. However, the soothing messages coming from the C-suite will help SAP apply more balm on the customer rope burns. That alone is worthwhile.

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