The major theme at the SAP Influencer summit this week was innovation...the first morning had presentations titled "Innovation without disruption" "Continuous Innovation" "Radical Innovation" - and just to make sure, the last one was titled "Accelerated Innovation"
In preparation for the Summit, I polled executives at several SAP customers what their expectations were of innovation from SAP.
Two representative comments/questions I got:
“How does SAP envision existing accounts to take advantage of innovations that given the scenario that the majority of these accounts is 'stuck on old releases with massive costs and time to upgrade or 'back-port' the functionalities?”
“When we decided to purchase software (from SAP) we did it for one fundamental reason…..we believed that they could outresearch us and create more inventions, faster, than we could. We were buying their ability to out-invent us so that we could then out-innovate the competition and/or an internal staff dedicated to creating custom solutions.”
At the summit, SAP took pains to showcase the speed at which customers are moving to ERP 2006. - “fastest uptake ever”. But how many of these are lateral, technical upgrades without really taking advantage of the services architecture, which SAP has been positioning as its big innovation the last few years? The majority, SAP executives reluctantly acknowledged.
Then we asked Henning Kagermann, what the most innovative thing SAP was next bringing to market. Business-By-Design he answered. But surely SaaS has been around for years now – it is not that innovative any more, was our push back. Well, SaaS at enterprise level footprint, not just CRM, is innovative he responded. At an executive panel, fellow EI, Brian Sommer asked a panel of SAP executives who they thought the most innovative tech company was. One said Google. One said Apple. Two more said SAP because of Business-By-Design.
Map this to a session with Peter Zencke. To prompt the positioning, I started the session with what he called a “provocative” question – if a customer with 10,000 users asked to be on BBD, would SAP say yes? No, he said. BBD is being aimed at a market of between 100 and 500 employees with an average named user base of 50. The reasoning – we want to be careful with the initial rollout. It does not matter that SAP’s partners like EDS have been hosting thousands of users for customers, that partners like TCS have been supporting thousands of application management users. SAP is initially doing it by itself without partners, to manage the “risk”
So how is this for disconnect? SAP senior management believes its hottest new innovation is BBD, and yet by its own market segmentation less than 5% of its customer base even qualifies. On the other hand, on its last major innovation - the SOA platform - after finally getting there, less than 5% are taking advantage of it.
Blame SAP. Blame its customers. But the two appear significantly out of sync.
