SAP Needs A Better Cloud And Platform Story, And A Good Story Teller


This past week, there was a 2 day influencer event in Palo Alto where SAP explained (or tried to explain) its Cloud, Mobility and DB&T vision to about 16 of us. SAP paid for my airfare and hotel and ground transportation. Many thanks to Mike Prosceno and Stacey Fish – you are the best at what you do.

We started with cloud on Day 1 .  Cloud session was led by some of the smartest people I know in SAP, yet it did not go as well as I expected.  None of us in the room seemed to understand what the cloud story really is even after SAP tried a few times. As a technology fan, it did not matter to me that SAP had a sub par performance in the same week as Dreamforce was happening, but I am not sure if everyone else in the influencer gang look at it that way.

Sanjay Poonen and his team did the best job at the event when it came to explaining SAP strategy on mobility. I would say Sharron Ruddock, the COO for mobility, deserves special mention for  how well she explained mobility pricing. Steve Lucas and team took second spot – a close second I should say – with their HANA and DB&T story. And cloud brought up the rear.

If I travel back in time, when SAP execs were pitching ERP to customers, it was all about the business needs that ERP solves. It was not based on ABAP and Basis that a sale was made (which I felt bad about at the time, since I made a living as an ABAPer).  Fast forward to cloud era – and the whole conversation started with technology. Isn’t the whole idea about cloud that we don’t need to worry about technology as much as before?  SAP missed the boat on this one, and should try to revise the story line before their next attempt at Teched and SAPPHIRE.

It is not to say technology vision is less important – it is vastly important. But technology does not serve a purpose without tangible business benefits. If SAP has to succeed in cloud – it needs a VERY strong play as a platform.  This is also where that old DNA question comes to mind again. SFSF has the DNA for cloud based Apps without a doubt. But has that acquisition helped SAP inherit something useful for platforms ?  If it has, then someone needs to point it out, I did not see it.

There were a few highlights that definitely caught my attention. My friend Sethu, who is the deputy CTO at SAP, explained to things that are important.  The most important one is that SAP should not have multiple platform pitches – like mobility platform, analytics platform, Neo platform and so on. There should be  just one SAP platform going forward – which unfortunately does not have a name yet. Sad to say – this important memo did not reach the other parts of SAP in time. We got great explanations of mobility platform and Netweaver cloud platform right after Sethu told us there will only be one platform. The second thing that caught my attention from Sethu was that SAP is aiming for a unified semantic layer for everything that works on SAP platform. This is a much needed aspect of the platform story, and I am waiting to learn more about this.

SAP also has a good integration story that Nayaki Nayyar explained. I had met her once at Madrid last year, when we co-judged innojam before SAPPHIRENOW there. Cloud integration is critical to SAP’s cloud and platform future, and Nayaki explained that there is an integration technology they developed called Netweaver Cloud integration , and that it has two components – PI on demand, and Data services on demand.

The integration concept is webservices based. That is good – I get that, but that is not to say it completely reduces integration costs. It still needs harmonizing security, data, IDEs, and a consistent way to meter the services and components.

I am not fully convinced of the integration story on cloud. To begin with – I am shocked SAP positioned it as Netweaver brand. I don’t know a lot of clients who think of netweaver as a best in class integration platform. And calling its components as PI on Demand and Data Services on demand just gives the impression that SAP just repackaged something to make a new offering. Nayaki clarified that it is not so – and that it is all brand new.  I am sure I have said it before, and will say it again – without an acquisition story to go with it, I doubt SAP will have credibility in market with an integration story.  There are a variety of acquisitions possible based on what SAP can afford from TIBCO to snaplogic.

There is no MDM on the cloud from SAP in this whole cloud integration story. So essentially, one of the existing transaction systems will need to be treated as the master for the data that integrated systems will play with. I am sure this is just a matter of prioritization for SAP on where to invest for short term. While this is ok in convincing bloggers, I am not sure this is a good story to tell customers who typically need a longer term roadmap. Not having an MDM on cloud story makes it harder for them to buy into this integration strategy in my opinion.

I liked the analogy that Aaron Au used (he is the SFSF CTO, and a very friendly guy) of how Amazon evolved from “it is all about the shopping cart” to “shopping cart is just a small part, and only used to close a transaction” to explain how SAP is looking at User Experience.  It is probably the best explanation of Systems of Engagement concept that I have heard from SAP till date. What did not happen unfortunately is that SAP could not tie this example to their products and strategy in a coherent way.

Rainer Zinow was articulate as usual on the ByDesign side. I finally understood the thinking behind Financials on Demand. It is good to know it is not exactly carving out financials out of Bydesign. In fact nothing is carved out – just some parts are activated and others kept inactive. And the business case is mostly the ability to do Mergers and divestitures faster, by moving those entities to the cloud solution first.  That is a story I can live with and I see value in it. I did not hear a ByDesign for Large Enterprises story – maybe I missed it, or maybe there is no such thing. In any case, I think ByDesign and B1 ( Richard Duffy is an excellent speaker I might add)  did not get sufficient coverage in this event.  At least there were no surprises.

I don’t recall anything earth shattering in terms of bold new use cases for cloud. May be the intention was to set the foundation with this meeting, and make the big announcements at Teched or SAPPHIRE. Or maybe I missed out the transformational message when it was mentioned. In any case – there were heavy weight cloud experts in the room with me amongst the influencers, and one of them might explain that part better.

Sameer Patel could not present his vision for social and collaboration in the event proper, but he took time at lunch to educate me on that. I am duly impressed – and it is a grown up version of how social and collaboration should work in enterprises, and it puts it in the context of business processes where it belongs.  Sameer gets the prize for the best elevator pitch of the day.

There was a slide shown at the end of the meeting, but put under NDA – which is kind of sad, since that was the best part of the story. Maybe the next time around, they should start with that picture and work back to the technology issues and solutions. I know it sounded cryptic – but I respect SAP’s reason to put an embargo.

Bottom line – SAP should do some serious homework on unifying the theme of their cloud story . Knowing many of the people involved in this, I don’t have the slightest doubt that SAP will get its act together quickly. It is not to please us bloggers that they should do it – if they don’t do this in quick time , there won’t be much attention from their customers who are getting better messages from other vendors. HANA will run fine for SAP for another year with no issues – but without cloud and mobility picking up pace big time, SAP might not live up to big ambitions of its leadership team. And as much as the story is important, SAP needs to find a good candidate from inside the company or outside to say that story clearly to the world.

This was way longer than I expected when I started the rant here, and I am sure I missed a lot of points. But given my day job needs me to to run back to my customers :)

 

 

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14 thoughts on “SAP Needs A Better Cloud And Platform Story, And A Good Story Teller

  1. Interesting to see your thoughts as I doubt SAP is going to get any positive press from the bloggers that saw that morning cloud presentation. The good news is that SAP is lucky it was a small group as it hopefully it will serve as a wake up call around their messaging in this area.

    Here were my two cents and I will embed your article within it later today.

    http://scn.sap.com/community/erp/hcm/blog/2012/09/19/sap-briefing–cloud-mobility-and-hcm

    Good seeing you and getting to chat in a small setting as well.

  2. “I don’t recall anything earth shattering in terms of bold new use cases for cloud.

    I often think the same thing but there are cloud use cases present in the SAPosphere that enthrall- they just aren’t promoted enough. Take a look at the “SAP for Utilities Cloud EV Readiness Package” as one example.

    http://scn.sap.com/community/cloud/blog/2012/09/20/sap-for-utilities-cloud-ev-readiness-package-a-new-design-pattern-for-sap-s-cloud-offerings

    I agree that SAP needs a very strong cloud platform to be successful in the future. I see bits and pieces of promise behind the curtain but these flashes of light aren’t enough to provide the cohesive vision that the market desperately needs and expects from a company of SAP’s esteem.

  3. Hi Vijay,

    The impression I got after reading your blog was that SAP was thinking aloud(aka brainstorming session) in that event. It seems they already knew they don’t have a story to tell on cloud. I don’t know the purpose/objective of Influencer event but it seems – based on my understanding of what influence means – the event accomplished the event’s goal. Wrong?

    Not sure why I feel this way but every time SAP works/develops on something what SAP Ecosystem demands to see is the product in its end state very next day. DR/HA for SAP-HANA is another example. When SAP demonstrated that HA feature in Sapphire-11 using hyped 100TB SAP-HANA, it brought chuckles to me. IMO, it was/is too early to demonstrate that feature. Good news is that SAP knew that(Vishal Sikka mentioned a while ago that RDBMS took 20+ years to mature).

    Best regards,
    Bala

    • Interesting way to look at that meeting, Bala . But that said – I doubt that was the reason for the lackluster performance . No one really asked for a product demo – all we wanted to hear was a logical story on how cloud will evolve .

  4. Hi Vijay,

    very interesting reflections you have made on this one. Just to add a few cents to it on what you had said in your blog and also what I am seeing in the field in general. You mentioned the ERP days of SAP when they just talked about business and not the “underlying technology”. For sure it was good at that time and you could gain extra credit if you knew the business side and the techie stuff. But also it was a time where SAP had a single focus the ERP. Now this has changed a bit and I think it will be interesting for all of us to see how the multifocus will be working out. There is ERP (still the bread and butter), there is Mobility in which everybody gives huge credit to SAP for having done things well. There is D&T where the messaging has changed quite dramatically in the last few month. From “we will be the the #3 DB vendor by 2015″ to… well I have not heard a lot lately.
    One of the things that SAP has done very well in my opinion is not fall in the Larry trap an being just very bullish about things. Also it takes a lot more than just having the best product in order to make it successful. I am curious to see where ASE, HANA and IQ will be going and what the end result will be. I guess a given fact is that in order to become #3 the number of installations & sales need to increase dramatically, this will also mean that the share the partners see of any of these projects will be interesting.
    Regarding Cloud I fully second your view that this is a whole different approach to design a product / platform and will imply many chances. The whole backoffice of implementing something has to be app store like. Which will be highly complex for the type of solution we are looking at. But the most important thing is that technology is nothing else than the vehicle. Just like we do not care when we make a phone call from our cellphone regarding which wavelength is being used, which antenna we are connected to and how our call is being routed, we only care about talking to the number we have dialled, we should not care what all happens in the backend in order to give us the solution required. This is what cloud is all about for me. Will be very interesting to see how this type of simplicity can be brought to something like SAP, I am sure it can be done ! Like SAP has demonstrated in the last 40 years.

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