How SAP Missed An Opportunity

Hello, it’s me again.  Your Friendly SAP — foe?

If you follow me you know that I admire the technical prowess of SAP, but despise about twice as much their marketing “acumen” (there are no other words that are politically correct and fit nicely between quotation marks).

I wrote about it in more detail in my post talking about their Reverse Dichotomy.  They innovate in technology and throw it away in marketing.

The latest launch event, yesterday, of S4/HANA (S stands for simple, 4 is the release number, and HANA stands for — er, well… HANA #LeSigh) continued that trend, with a twist.

There were high points worth mentioning:

  • The reduced and centralized data model (finally, finally, finally — but wait, does that include SuccessFactors?  I don’t think so… we are still not there)
  • The use of metadata (I think they call it customization, but by any words the concept is to allow customers to customize services via the use of metadata – one of the very few companies to do that)
  • A complete rewrite of the platform (yay, yay, yay – 30+ years of spaghetti code base and band aids had seen its day – good riddance)
  • Performance improvements galore (yes, finally – but seriously, 8 seconds responses are not something I’d brag about – even if 4-6x better than what they offer today – and don’t even ask the SuccessFactors clients for their opinion of those “great response times”)
  • A better way to cloud (will discuss the downside of this later in the post; but there were steps forward).

All in all, a good evolution for SAP as it introduces the first major innovation in their product since version 3 (R/3).

Good – right?

Yes – but mostly no.

SAP had been late to the cloud, to platforms, and to offer what their customers demanded in the form of a platform. and Microsoft have already addressed this, Oracle is working some of their marketing magic to convince their customers they have it (although they don’t so much) but SAP had been very, very quiet.

Well, not really.

Marketing wise they have been playing marketing musical chairs for the past few years relabeling and renaming their products under different launches, names, and what-nots – but never with a centralized perspective.

This is why they were behind companies like Salesforce (who spent a good 4-5 years retooling to create the Salesforce1 platform, only to waste the opportunity with a mobile-client marketing message that was not so good… or as my iPhone auto-correct would say, ducking socks) and Microsoft (who recently launched XRM, but how long it took to build depends on who you ask).

It’s been several different incarnations and versions for CRM for cloud, HANA, on-premises, and on-demand with different names and mostly the same product or slightly repackaged for some time.  Same happened to other products in the lineup.

I was looking forward to this release as it had been touted to me as the centralized, all-in-one release that will unite all products, fix the platform, change their approach to cloud and platform, and overall drive adoption for the next generation.

They fell short.

They had an opportunity to do that (I liked HANA from the very early conversations about in-memory and improved performance, and each time they showed what it could do with analytics and data management my mouth watered at the possibilities; they had some very interesting architectural approaches for CRM and the acquisition of SuccessFactors brought top quality talent to help them move forward; and more) but they did not take advantage of that opportunity.

They let the opportunity to deliver a market-leading platform that would match their competitors languish.

They missed the opportunity for the same reason Oracle chose not to chase it (as I wrote before): the biggest worry was to move forward with their late-adopter customer base versus doing something innovative and changing the conversation – or worse, leading the market (the necessary components and thinking are widespread throughout the company, just not properly utilized or in some cases even recognized)

I get it, I am not going to chastise them for doing the safe: retaining revenue and ensuring it continues to trickle in for the foreseeable future.  Alas, they left behind the ability to both impress and capture new customers in exchange for servicing their existing ones.  A safe move.  A lost opportunity.

Some of the items that caused me to write this from their recent launch?

  • The admission that multitenancy may not all that’s cracked up to be (how i wish I’d’ve said that before…  wait, I did) but still being offered (mostly because after many years of saying it is essential you can just walk away – and because…)
  • The insistence of offering on-premises version of the solution in addition to public cloud (and won’t even stop to answer questions about private and hybrid clouds… sigh); worse was the reasoning – some verticals  cannot do it – which is antiquated and wrong, but that’s another thread/ topic/post.
  • Not building on the concept of three-tier public and open cloud in favor of retaining the “platform” in HANA with little ability to be replaced or to use supporting services from other vendors (yes, like any other vendor – they want to retain the “ownership” of the client via their platforms, old habits die hard for all of them)

Short version of the complaint? They stuck by the slow-moving, late-adopting mass of the majority of their customer base instead of using the  potential of HANA to create new and innovative.

Just like Oracle before, it sucks – but I guess it is the way they had to go.


2 Replies to “How SAP Missed An Opportunity”

  1. interesting,

    cannot say that i thought about it that way – but it is an interesting observation.

    i see it more of a “keep your known devils” type of approach – you know you can always get an extra 3-5+% more from existing customers with minimal effort – is that enough to sustain growth and ongoing operations? do you need more customers? are they different than the existing ones (i.e. do you need different products)?

    those are the questions that oracle and sap seem to be asking to make decisions on where / how to move forward.

    sfdc made the decision that they were not at the size they watned to be and to grow they needed a new model / approach and took that path – as painful as it was.

    the way i see it.


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