SAP's cloud chief eyes Workday, Salesforce.com turf

SAP wants to be the biggest cloud player by 2015, but has a lot of catching up to do.
Written by Larry Dignan, Contributor

SAP's cloud chief Lars Dalgaard, former CEO of the acquired SuccessFactors, has outlined his master plan to create the largest cloud company in 2015.

But first there's a lot of work to do. Dalgaard plans to measure SAP's cloud success by "net promoted impact," first to market apps and total sales volume. Only the last one is easily measurable and the benchmark that will be followed.

The catch: Salesforce may hit $3 billion in revenue for its current fiscal year and analysts have it pegged for $4.68 billion for fiscal 2015 ending Jan. 30. SAP's cloud subscriptions and support revenue based on first quarter figures are on an annualized run rate of about euro 120 million ($152.8 million) or so.

Dalgaard's memo, posted on Posterous account via German journalist Michael Kroker, is straightforward, but the end goal to be the biggest baddest cloud player is tough. SAP today doesn't have enough sales or customers in the cloud today. SAP's annual cloud run rate trails NetSuite and Ariba, two rivals Dalgaard considers second tier.

Also: Cloud dancing: CIO perspective on SAP's cloud strategyNetSuite and SAP: a tale of three development modalitiesSAP Sapphire: SuccessFactors' Lars Dalgaard swings for the cloud fences

However, SAP does have 5,000 employees hoping to change that equation. SAP also needs to "start selling a lot more relevant and competitive product," said Dalgaard.

How will SAP close that gap? According to Dalgaard the plan is to:

  • Hone the product lineup and focus on the winners.
  • Accelerate the product and development pipeline and win deals.
  • Tout how SuccessFactors moved all of its infrastructure---Salesforce.com, Concur, RightNow, Netsuite, OpenAir, Coupa, Avalara and Onbase---with SAP on demand software.
  • Focus on human capital management, finance, CRM and procurement.
  • Feature a loosely coupled suite that works with SAP on premise software.
  • Offer Business ByDesign for mid-sized companies and BusinessOne OnDemand for small businesses.
  • Open up the platform.
  • Aim to win accounts pronto from Workday, Oracle/Taleo, Salesforce. NetSuite and Ariba were deemed "secondary competitors."

To finish up, Dalgaard rolled out a broad reorganization to focus on those aforementioned goals. Dalgaard said the cloud reorg will be communicated internally and then unveiled to the masses in "the next few weeks."

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