When I wrote SAP Nation, I built several economic models on the size of the economy. In the book, I presented one which runs about $ 200 bn a year. The most expensive model showed close to $ 400 bn a year if you included end user time and cost allocations, amortization/writeoffs and a few other elements. $ 200 bn was scary enough and I used that in the book.
But after Sapphire last week, I am beginning to worry that S4HANA may actually accelerate the SAP customer spend, and even by my narrower definition push SAP Nation to $ 400 bn a year.
SAP kept talking “simplify” – the un-customizing, data cleansing and other prep without much discussion of automated tools. So that will be labor intensive, as will integration and testing.
How labor intensive? Brian Sommer paints a vivid picture as he walked along the partner booths last week. He documented slogans at over 15 services firms all of which claim “simple”. His summary “I was, simply, overwhelmed with the unanimity of scores of service firms all focused on simplicity.”
Trust me, they may claim to have automation, but their business model is labor driven. That “simplicity “will substantially raise labor costs in SAP Nation.
I told someone a few months ago, my book will have been a complete waste if SAP customers continue to spend $ 200 bn a year, or another trillion by 2019. Amazingly, with S4HANA they may get there by 2017.
Except they won’t.
The good news is I have presented to many SAP customer audiences since the book came out – including a CIO.com webinar today. More and more SAP customers are trying out the 12 strategies in the book – third party maintenance, ring fencing with clouds, changing hosting/apps management vendors etc.
What SAP and its partners should be doing, many customers are finally doing themselves. Simplifying.