I haven’t written much in the way of news from Sapphire08 in Berlin so far, except for this short piece on green process innovation or the lack of it, but one comment has really stayed with me – the quote I used for the title of this piece. I am not going to name the executive that said these words, but its clear major change is now. For SAP these will be interesting times, in the Confucian sense. The wall is coming down.
SAP traditionally stands for continuity and third mover advantage. Its a very German company with a strong culture of consensus – can you imagine a Silicon Valley firm with a co-CEO setup? The contrast with Oracle’s top down command and control approach could not be any starker. But the purchase of Business Objects may have finally tipped the balance away from the German axis that has controlled the firm for so long. SAP wants to get into situational, unstructured apps that cross boundaries but it will need a new mindset to get there. The company doesn’t currently think in terms that allow for uncertainty- every process must be tightly bound. But managing knowledge is an inexact science. IBM is creating a new brand, Infosphere, to sell into the same space after its acquisition of Cognos (of which more here… For Mash Get Smash)
Some old hands such as Peter Zenke are taking a step back from active day to day management, while other new players are jockeying for position. Zenke I should add has evidently done a more than solid job with SAP’s BusinessByDesign SaaS platform. We were somewhat skeptical at first, but evidence is slowly mounting SAP has built something powerful, with social characteristics that take advantage of the network just as a SaaS app should (the community-based help functions, for example, look promising.) The beta program is being very closely managed by SAP, but early customers like what’s been delivered. [I was going to link to a piece I thought Dennis wrote on the subject of customer adoption but Goog didn’t find it].
SAP had three different power centers- Israel, Palo Alto, and Walldorf, but Business Objects brings a cadre of people in San Jose, strengthening the West Coast connection. Ex-CEO and chairman of the supervisory board Hasso Plattner also maintains a fiefdom in Palo Alto focusing on driving design thinking into SAP apps.
In meetings in Berlin you could feel that things had changed. Executives were less relaxed than they had been recently. Some were putting themselves forward more aggressively. Its not clear how everything will shake out, but I tend to agree with the quote: SAP is set to go through a period of substantial and rapid change. The German contingent won’t be taking August off this year…
What does all this mean for customers? Not a whole lot at this point. Don’t expect any sudden product or strategy changes, though there will almost certainly be some changes of personnel before the Autumn.
disclosure: SAP is a customer, and paid for travel and expenses to Berlin. IBM is also a client. Oracle is not.
Picture of where the Berlin Wall used to be courtesy of Nigel James, ace PHP and ABAP developer, currently looking for a position.
Nigel James says:
May 31, 2008 at 10:06 am
James,
Great post and thanks for the shout out.
You could tell there is a lot going on. Not least with the co-CEO transfer but also at other levels. TechEd in October will be interesting.
Nigel
Dale Vile says:
June 1, 2008 at 12:55 pm
Interesting feedback, James.
I was unable to make SAPPHIRE but have been following developments very closely. I think the contrast you draw between Oracle and SAP is very apt. I don’t think the core ERP and CRM estates in the Tier 1 space are under threat, apart from in that subset of accounts that have major Oracle and SAP landscapes co-existing. The more interesting action is in the white space – BI/performance management, people (rather than process) centric collaboration, and arguably mobile and remote access. Our research tells us that activity in these areas is a) fragmented and b) growing (in terms of increasing or changing demand), and that there may be some interesting big decisions on strategy among customers that impact who controls which accounts.
I am personally interested in the MS and IBM roles in all this, as well as SAP, as Oracle is the common enemy of all of these, but the power games at both a market and account level are quite delicate.
Meanwhile, the possible battle for the SMB and VSB space will also be interesting, I think that SAPs previous focus of putting all of its eggs into the SaaS basket is misguided here. If they do go down that route, they stand to be eclipsed by competitors who execute well with a traditional channel strategy around on-premise solutions, which is where the demand will remain for some time to come.
Was there any news on that front from SAPPHIRE?
Roland Judas says:
June 2, 2008 at 12:26 pm
@Dale: I’m still faltering If i should agree you thesis about Core ERP and CRM in the tier 1 space not beeing under threat.
During the last months we saw many new players on scene with wide choice of offerings in the grid-cloud-Saas-Paas-DaaS field.
How long do you think, that this phenomenom will stay in the SMB/VSB sector? My guess is that within the next 24-36 month we will see a Enterprise scale project of PaaS-technologie. And then the gates are open.
I strongly believe, that the big tier 1 players have a similar fear and so a faux pas like the precipitant announcement of Business-by-Design could happen.
Or do you think that this massive delay is part of SAPs recently announced ‘strategic agility’ vision von 2008? I’m only a hobby analyst, but for me it sounds like fear, knowing that ERP-market as we know it is declining. And BI as glue for putting the pieces together after being struck by the ERP-monsters was only the beginning…
Just my two cent
Roland
jgovernor says:
June 6, 2008 at 4:11 pm
@roland fear is good. SAP has survived massive infrastructure shifts before, and come out with increased market share. i am not saying that means it will again, here, but at least it has a completely rearchitected platform to pursue the new architectural expectations
SAP: Out with the Old, Shrugging Off The Tag says:
December 10, 2009 at 7:23 pm
[…] have taken longer to shake out than I expected when I wrote “There’ll Be More Change at SAP in the Next 6 Months Than The Previous 30 Years”. But shake out they have. SAP wants to get into situational, unstructured apps that cross […]