Whither SAP Verticals?

While several bloggers reported good progress from Sapphire last week in a number of SAP horizontals - Jason Busch on SRM,  Jason Corsello on HR, Brian Sommer on Business Objects and other analytics, and Paul Greenberg on CRM, I was disappointed to not see much coverage on non-manufacturing verticals such as banking, utilities, insurance, healthcare etc.

I asked 2 SAP executives - Jim Hagemann Snabe and Bob Stutz - at Sapphire about such verticals. Jim acknowledged legacy, typically custom developed vertical applications have been tough to displace particularly in the US.  In a few deals where I have seen SAP vertical proposals, I can tell you the "displacement" is tough because SAP's TCO (particularly those of its SI partners) has not been compelling - you could custom develop that functionality again for cheaper. Just maintaining the legacy apps is even cheaper.

Bob told us they were planning a CRM onslaught on several verticals. But overall, I did not see not much more on specific vertical functionality.

It would be nice to validate SAP' claim it is  is "strong" in 24 verticals when for the most part sells core ERP modules outside of its manufacturing base. Here's typical SAP-speak - Bill McDermott talking to AMR Research last month "The subject then turned to hot verticals. He immediately cited banking and retail. On the banking side, companies are starting with financials. The plan is to move them to more of the ERP suite and then on to core banking applications." 

That's horizontal functionality, my friends till (if) those customers get to implement those core banking apps.

Problems like those at Waste Management occur because of ambiguous definitions of "wall to wall" coverage in many non-manufacturing markets. If not SAP, its SI partners are pretty loose with definitions of vertical maturity.

Next time, I go to a Sapphire I hope to request Mike Prosceno to stack my schedule with non-manufacturing vertical sessions. I promise to also stay longer than a day :)

Update: Frank Scavo provides another POV