Charles Zedlewski and Jeff Nolan, both of SAP argue in their blogs that innovation is alive and well in enterprise software. Charles makes the point that we are going through an infrastructure software renewal cycle. Jeff uses the macro-economic rationale. Productivity in western economies has been improving - how you not credit IT (and by extension innovation in software)?
Neither of them (perhaps modestly) alludes to SAP's own "innovations". They should. On Charles' point - SAP is not an infrastructure provider. Ok, by default it has become so in its customer base, but no one goes out to just buy infrastructure capabilities from SAP. They are an applications company. On Jeff's point - see my note Business Process Angioplasty and SAP. In many companies the cost of implementing SAP has reduced process productivity, not improved it.
My suggestion would be to benchmark SAP (and other enterprise software vendors) against the 5 elements Ray Lane laid out in his recent sandhill.com article. He says way too many software vendors are describing innovation as services (SOA, SaaS). Instead he says they should be asking themselves: Have you been verticalizing? Are you becoming more open? Are you helping CIOs innovate, not just improving your own product?
Using Ray's framework, it would be so much nicer if SAP talked about its more recent utility industry functionality and customers. Or what it has been doing with open source database MySQL to reduce TCO for its customers. What their board member Claus Heinrich has authored around RFID, and how SAP customers have taken advantage of that. Why X-apps are finally coming of age 5 years after SAP announced the concept and how they will help CIOs innovate.
In the end, customers decide what is innovative and what is not. We can protest they are not comparable, but innovation is being defined by Google and Apple. I do not see a groundswell of customers saying "I cannot wait to get to the new stuff SAP is releasing". If anything I am hearing "Here we go with another expensive upgrade". I am hearing "I wish SAP would lower its maintenance rates so I can do my own applied innovation". At gross margins of over 70% and (new) R&D at less than 10%, there is a lot of give.
Innovation is when customers go "wow" not "gulp".
