The SAP Reverse Dichotomy

When I was a Gartner analyst I owned the eService magic quadrant.  The process was quite arduous; worse part was listening to vendors hype their offerings.  No vendor was quite good at it, but SAP did a poor job of explaining and showcasing what they had and their marketing message was a mess, often failed to cover what I was evaluating.

I still remember the time we had a heated exchange on Knowledge Management (me: you don’t have it, them: we are the best).  I challenged them to produce either a client or an internal resource that could convince me.  SAP came back with PhD in Linguistics that worked in their lab, with extensive academic and commercial experience in knowledge, knowledge management, natural language processing, linguistics and related fields.  I was overpowered and became a lot smarter about opening my mouth to challenge vendors (i.e. only when I knew I would win) and was introduced to the SAP Reverse Dichotomy: our technology is better than what we tell you we have.

Most vendors say one thing, usually over-hyped, and the product delivers something different, not so advanced.  While marketing usually wins at most vendors, SAP suffers from the opposite: they often have more in their labs and in their products than what they sell.

And the next generation of applications, based on what I saw the Influencer Summit, is no exception.

Their message talked about retaining the in-premise core product, using NetWeaver for integration to other systems, embracing non-TLA end-to-end processes as the core, and using analytics (present everywhere).  They expanded their message with the old-tried-and-failed approach of pre-packaged end-to-end processes (which I would have never recommended),and  a poorly-worded conflict between private, public, and hybrid clouds as the main excuse for not going in that direction.

The demos showed a very different product from the one being discussed in PowerPoint .  They showed use of REST interfaces, mobile platforms, incredible speed through the use of in-memory analytics and data manipulation, complex transactions and integration, and even support for the cloud.  They showed embedded analytics being a critical part of everything they did.  It was a competitive product.

Of course, this was my interpretation – not their exact words.  I did not attend the entire summit, just the keynote presentations via the virtual summit  which had the main message.  It is my understanding, by following some of the other sessions via Twitter that they went into deep details into Small and Medium Business Strategy, Use of Embedded in-Memory Analytics, and different delivery platforms – including onDemand.  I don’t have details on any of those, but the following reviewers can provide more details:

  • Paul Greenberg has not yet published his review as of this writing.  But being Paul Greenberg, you know it is going to be good.  Look for it later today (Thursday) at his ZDNet blog.
  • Jesus Hoyos did a quick review via Radian6
  • Dennis Pombriant talked in more detail about the cloud and SaaS versus on-premise
  • Excellent summary of their message via Ventana Research

Bottom Line SAP has a good chance to become a competitive force if their marketing messaging does not get in the way (and don’t forget execution — even on reduced expectations you still have to deliver).  Having a strong product with good features, and bad messaging, is the opposite of what you see in this market.  SAP has been working on fixing their engineering-as-lead-feature core message and hopefully they will get better during 2010 at presenting their product.  Then we will have fun next year at the Influencer Summit (which I hope to attend in person).

What do you think of SAP? Did you evaluate, test, or implement it and found it to be different from their promises (better, actually)?  Would love to hear your thoughts…

9 Replies to “The SAP Reverse Dichotomy”

  1. Re analysts – shocked that you think for one min vendors ‘over hype’ to get a better review or stronger position on the MQ… 🙂

    re SAP. I think one of their biggest challenges is around innovation and ultimately execution. With google for example their labs (to some extent) their labs. It’s a shame that companies invent great stuff only to hide Nd never share it!


    1. Nigel,

      Of course, I never meant any vendor with whom you worked — I know you are far above that :).

      The interesting thing is that in spite of knowing that is not their stronger point SAP has not done a superb job of managing the message better. Their recent changes to the Influence Relationship program (which, btw, earned an award last year) is one strong step in that direction, as well as having brought new thoughts in the form of people from the outside at high enough places to make a difference. I am hoping that innovation from the labs will move to marketing (it is already in the product) in a short term so they can enjoy a better position… oh yeah, there’s that pesky execution thing also.

      Thanks for the read!


  2. Esteban, I am new to SAP as analyst to the Latam region, but at the summit I saw some interesting things that can change the market… specially in Latam. It will come down to their marketing message…and ability to execute…

    On Demand Business ByDesign for the SME market in Latam could be a big hit since it is more than just CRM… and I like the fact that Business Objects will be available as an On Demand solution.
    .-= Jesus Hoyos´s last blog ..Analisis de las conversaciones del #sapsummit =-.


    1. Jesus,

      Well, I would not call yourself “new”, but will give you that for now. I think that SAP has the same challenge they always had, but this time the product seems to be stronger than in past iterations — which may just work in their favor. Having brought new thoughts from the outside on how to do things may also help them. It will be a very interesting year.

      BTW, thanks for the time to tweet while down there. You were a very close #2 in number of tweets – but you kept switching from English to Spanish, which made it more interesting.

      Thanks for the read.


  3. Esteban,

    Amusing post and an interesting read. I am going to be careful and this is your warning; the rest of my comment could be viewed as stereotypical, but should lead into more interesting dialogue about differences in reaching customers in different geographical locales.

    SAP has always been a leading force in technology applications and engineering – consitent with many products that come out of Germany. I lived in Germany for nearly a year and the fabric of their society is much more focused on the mechanics of things happening than the presentation of how they will change your life.

    In my ERP days, I sold and implemented BaaN, a Dutch based product with similar tendencies (sorry Dutch and Germans – your cultures are relatively similar). Great product – poor marketing (which ultimately led to their demise as an independent company). At the time, SAP was the leader, with BaaN, Peoplesoft, and Oracle vying for spot #2.

    The US is the most marketing centric culture in the world. As you point out – this market expects hype, overpromise, and the WOW factor. Experiencing less is, in some twisted way, somewhat disappointing.

    I am wondering if folks in Germany and the Netherlands receive the message(s) the same way that you (we) do, or if it is more relevant and effective there?

    Interested if you or anyone could point me to more documented research on general tendencies and expectations of different markets around the world.

    SAP, are you listening?
    .-= Brian Vellmure´s last blog ..The 5 Stages of Customer Acquisition for the Social Business (Part 2) =-.


    1. Ouch Brian! You might think that Dutch and German cultures are similar, but in actual fact they are quite different! The decision-making process is more consensual than in the US – which may lead to a longer process to get things done, but on the other hand adoption is more thorough. Other than that in Germany more credibility is given to people that have academic titles, whereas in the Netherlands pragmatic results matter more…and this of course is just skimming over some of the differences.

      I don’t know whether it is just these two countries or whether it’s Europe in general, but here you need to spend far more time proving that what you have to offer actually does what you promise. The RFP process is longer, and the Proof of Concept has to show that it meets the prospects’ specifications to each and every item. There is no selling on Powerpoint-only.

      The current message that I hear from the market is that if you’re only after the standard functionality SAP is great, but anything non-standard means that you’ll be twoa and a half years down the road before you can cut off your old systems…so this may be the reason why they’re not keeping on blowing their own trumpet too much 😉
      .-= Mark Tamis´s last blog ..Social Learning and Customer Engagement =-.


      1. Mark,

        While it is true that SAP does not do a good job of customizing / changing their core product, which is not always the best, their main competitors in CRM are basically the same. Maybe less time to do the customization, but the concept of taking a log time to change the core product remains the same.

        I am quite certain that Brian did not mean much on the culture differences, but his point was a good point – especially so for SAP that is run at the highest level from Germany.

        I do understand the concept of difference in cultures and countries working differently, having covered Latin America and Asia Pacific for some while for CRM. The differences between the three places (North America being the third – even with the smaller differences betweem Canada and USA) is outstanding in all aspects. Selection, deployment, proof-of-concept, expectations, time-to-deploy, sales-cycle-time… they are almost different worlds!

        Thanks for the read and the comment, same apologies to you on the late reply.


    2. Brian,

      This is a very interesting comment (albeit me responding so late, apologies). Not only because you are talking about ERP before and CRM now (which is a very interesting experience), or talking about BaaN (oh yeah, I knew them way back then for a screen-scrapper product they had either acquired, sold, or done something to it).

      No, it is because you hit the nail in the head when it comes to SAP’s main perceived problem: the global company with clashing cultures for engineering and marketing. Anyone who ever worked at SAP at any time will tell you that it is an issue – and that is one of the issues that supposedly bringing people from the outside is solving. Supposedly.

      Very interesting observation.

      Thanks for the read!


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