​SAP's Sapphire Now challenge: Selling empathy over economics

If you're not feeling the love from SAP you can drop an email to CEO Bill McDermott. Run Simple now includes a dose of empathy. Will that matter as SAP transitions to the cloud and competes with rivals?
Written by Larry Dignan, Contributor

SAP's digital board room will now feature more empathy for customers.

SAP CEO Bill McDermott told his giant customer base that if they weren't feeling the love from the company to drop him an email at bill.mcdermott@sap.com. He then proceeded to say "empathy" dozens of times before yielding to the time tested "run simple" theme.


The talk at Sapphire Now in Orlando revolved around an effort to "keep it real" and address gaps between implementations, technology and people. SAP's pledge is that it will provide value on implementations, help customers run in real-time and digitally transform. Sound familiar? It should. SAP has had some spin on simplifying at recent Sapphire conferences. The empathy for customer theme is new, but the idea is that SAP is going to be all about the customer and that customer's customers.

"We have to care. And it only happens when you're empathetic and intellectually curious at all times," said McDermott. "If we don't get it right on Monday, we'll get it right on Friday. We are now a customer driven company."

Constellation Research analyst Holger Mueller noted:

Two years ago Bill McDermott used 'simple' as key messaging umbrella for SAP, today he switched it over to customer empathy. He had the heads / leaders of Ariba, Concur, Hybris and SuccessFactors all stating how much SAP has done already in regards of empathy.

McDermott's Q&A format keynote, which included customer panels as well as a strong bench of execs, was aimed at portraying SAP as a co-development partner. SAP's HANA in-memory database is getting more distribution via partnerships with the likes of Apple and Microsoft, which will team up its Azure cloud with SAP analytics.

Also: SAP puts HANA in Microsoft Azure in latest distribution play | Apple, SAP forge enterprise app pact for iPhone, iPad | SAP off to a slow start in the US, but cloud revenue grows in Q1 | IBM, SAP partner to couple HANA, cloud, cognitive computing

More importantly, McDermott is backing up HANA deployments with a "value assurance." This pledge from McDermott revolves around making implementations easier and having its services ecosystem on board. "We will innovate and optimize to give you the most tightly coupled, most productive system in the world. We went one step further. We told the ecosystem that you have to get on the bus with us," said McDermott.

Value assurance in a slide looks like this:


That services partner move is long overdue. SAP has danced around its ecosystem for years and the result is projects where vendors, consultants and customers all get to point blame at each other.

Under Armour CEO Paul Fipps on a customer panel noted the disconnect. "There's a disconnect between the technology and services capabilities internal and external. How do you implement this innovative technology? I think there's a gap there. The challenge for SAP is closing that gap," said Fipps.

Credit SAP for allowing customers to note the gaps during a keynote. The challenge is closing that gap. The other challenge is that customer requirements are moving faster than you can implement HANA or an on-premise application.

Can empathy and McDermott's "being human with each other" overcome economics?

SAP's HANA database, like Oracle's offering, is battling cloud options like Amazon Web Services and its various analytics engines. For all the partnership talk with Microsoft and SAP, Azure's analytics and machine learning capabilities compete as well as integrate with HANA.

Meanwhile, the customer theme has also been preached by everyone from Salesforce to Workday to many other SAP rivals. Incumbents like SAP and Oracle mean long implementations and consultants. Empathy will have a hard time overcoming those costs. Sure SAP has a cloud story, but one problem with the company's first quarter was that license deals slipped out to the second quarter.

SAP's customers aren't going anywhere and have bet on the company for the long run. But if SAP is going to expand wallet share it will have to thread the needle between innovation, empathy and economics.

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