Mr RedMonk Goes to Walldorf

After having lunch with Oracle the other day I am here at arch rival SAP’s headquarters. I will leave you, dear reader, to decide which firm is taking bloggers most seriously. One firm is looking to push the snowball down hill by directly talking to bloggers as an influencer community (where did that Cluetrain link go, again?)

I have joked in the past that in future we may need to rename the company RedMonk RedWall, and its goodness that another one of the big 4 is taking the time to help us really understand its portfolio.

I am pleasantly surprised so far by the degree to which SAP “gets it.” Apparently there is no need to send in the horny clues. There are some potential big gotchas though, so watch this space.

SAP’s Smoky Corridors (Never mind the Asparagus Fields)

SAP is interesting to cover as a professional industry analyst and amateur anthropologist, not least because of the great distance between here and Silicon Valley. I don’t mean difference of distance, but of culture. Never mind whether AJAX is real or not – there are people smoking in the corridors here, and they served blinis with SAP Chardonnay before lunch. There again – I ordered the gourmet breakfast this morning and my poor German meant that I had not realised it included sparkling wine. Two or three sips of sparkling wine before 12 o’clock – seems reasonable to me, but I am sure others would be horrified. I tend towards Louis Gerstner’s views on alcohol consumption though. And when it comes to nicotine addiction and Europeans inability to shake the habit, from SAP’s perspective this is after all the customer briefing center- why make these customers go outside just because they want a smoke?

We get so used to using “the culture” as a shorthand for American corporate culture that sometimes its easy, at least for someone that covers tech firms, to forget there is another way. As Friedman says the World is Flat, but it’s the peaks and troughs that make life interesting.

And Europe has a lot more cultural peaks and troughs than the US. Its why SAP is built from the ground up with internationalization in mind, and culture.

On Going Native in Walldorf

Is there a danger of me going native? Am I going to be nice to SAP? Well, that depends. Dennis and Vinnie might argue that I should hold the position of curmudgeon first, and analyst second, but I like to think I put the analysis first, and let the cynicism take care of itself. If SAP is nice to me, am I likely to be predisposed to its content? The question is so obvious as to be facile. But show me the man without prejudice and I will show you the wooden box they are lying in. But a predisposition is of course not an analysis.

Also – if I come to Walldorf for two days and can’t find something interesting or positive to say about SAP’s current story then I would make a pretty poor VP of sales. Its up to you to decide whether or not a visit to Walldorf will compromise my analysis of the market.

SAP is not a paying client, but the firm is already consulting with clients using the RedMonk compliance oriented architecture as a framework for discussion because the intellectual property is freely available. Someone recently told me that many people would argue that you get what you pay for, and that free content is not worth much. Well if weren’t for RedMonk’s use of the creative commons license, to drive community-building efforts, then I wouldn’t be here in Walldorf at all. Credibility, I would argue, is based on community, not necessarily associated fees (psychological research which shows people more likely to take advice they pay for, notwithstanding.) There again, the notion that enterprises would use a free operating system used to be pretty outlandish. Of course Linux isn’t free- but then neither is RedMonk. Our content is free but our advisory services certainly are not.

But back to SAP.

SAP’s New Old Guard: How did we get here

The first executive I met, before lunch, was Nils Herzberg, chief operating officer, product technology unit, Industry Solutions. He is the kind of guy that you need to talk to if you rally want to understand SAP.

Nils is one of SAP’s old guard, but he has clearly transitioned to the new world. He defiantly gets it, in the sense of the increasing importance of open intellectual property in building ecosystems.

“You can only lower barriers to entry if you have gravity… You need to be attractive. You need to attract ISVs… of couse only some companies can create successful ecosystems. You need to make sure it makes money. It’s a market mechanism. It has to be the most profitable market though, to be the most successful ecosystem.”

Nils gave me a clear sense of the history involved here, and how SAP began the long journey to a more flexible go-to-market approach, based on a more open platform architecture, but also how “industry solutions”, or verticals, had become such a core part of the company’s strategy.

Nils began his time at SAP in 1997 in the aerospace business, as customers in this vertical were agitating for SAP to embed more vertical industry semantics and specifics into the core R/3 platform.

“Aerospace customers had asked: when are you going to support our business processes in our software? Plattner said now.”

Plattner needed someone to tackle the aerospace challenge. That someone was Nils. One element of his narrative emphasized how much has changed in the intervening years from a corporate governance perspective.

“We had huge revenues based on the commitment to Aerospace, said Nils, “GAAP wasn’t so tough at the time.”

The model was thus extended: “We had done gas, oil and utilities… So we tilted the conversation on its side – and created the industry business units.”

We then went on to discuss how first wave CRM wasn’t really CRM, and how best-of-breed is last year’s battle, why “all SAP deals are 20 year deals”, how Hasso was all about ships and aeroplane analogies, the story of Netweaver and what South African firms can teach the rest of the world about selling beer. But on that note dear readers I must repair to a hostely to partake of some weizen beer in a garden with a tree. So I will blog some more on Nils and what I learned on the first day of my first trip to Walldorf later.

sap, CRM, Walldorf, Oracle, asparagus, R/3

disclaimer: my title is a bad pun on Mr Chips. I am course only one of the Mr RedMonk’s.