deal architect

SAP’s $ 2 trillion college education

If you add up all the systems integration, hosting, upgrade and application/basis management costs around SAP in the last 25 years – that done by its partners or its customer staff, I estimate it has been over $ 2 trillion in costs.

As Harald Nehring of SAP comments on my blog:

“Did SAP and its (later) partners set out to create the $2T market on purpose? I guess not, it happened because of all participants, including the consumers. So I'd say all participants share a responsibility to balance this market out, SAP can't do this alone.”

He is correct - but in the brave new world, SAP will have to do more "alone"

It will need to show SLAs on its trusted site. It will have to show availability at close to 100% month after month. No hiding or pointing fingers at others. It will have to deliver to emerging benchmarks of 5 minute upgrade downtimes. It will have to compete at $ 100 a user a month. Its projects will be measured against that much-lower software cost basis.

The risk is it will turn to the “teachers” it has had for a while. Can HP teach it about emerging cloud metrics? Can IBM teach it about 5 minute upgrade windows? Can Accenture teach it about agile implementations? Can Infosys teach it about massively scaled, multi-tenant application management? Can EMC teach it how to deliver incremental storage capacity at 20c a gb a month?

Sure they can. While speedily trying to learn it themselves.

Let's face it - innovations in next-gen data centers, delivering service-as-software, managing shared services across tens and thousands of customers, delivering background upgrades have not been coming out of SAP's ecosystem.

The waste in the $ 2 trillion that its customers could have avoided over the last couple of decades is bad enough.

The fact that SAP may have to start afresh – cold and lonely - after helping so many of its partners make so much over the years, is to me, a travesty. 

But its's time for SAP to get selfish and ask each of its partners: What can you do to take me to the new world, not keep me grounded in the old? Two trillion reasons why it has earned the right to expect more from its partners. Frankly, it would be better off getting a new generation of partners.

Because there are two trillion reasons why its customers are expecting, actually demanding,  it to optimize their past investments.

Verizon – pulling defeat from jaws of victory

I liked Verizon’s list of technology trends here

In 2006, I said the future is so bright for telcos as they sit bang in the middle of 5 “mega-trends”

- Globalization
- SaaS
- Mobility
- Collaboration
- Telemetry (GPS, RFID etc)

Verizon’s list of promising trends builds on this. That’s where they should be focused.

Instead Verizon keeps wanting to dip back and nickel and dime its customers. We recently had an erroneous call to Ireland (we usually use Skype or a calling card) . Verizon charged us $ 4 a minute after taxes. The lady of the call center insisted this is what it costs Verizon. When did they last update their agents scripts?

They have issues with early termination fees (back in the news again recently), shortfall fees, late fees even when their billing system is at fault, they have tried to substitute a lapsed tax with a “supplier surcharge”. Over and over again they annoy their customers by sneaking charges in and then making their agents defend their policies. If you have ever been to their retail stores, they are so sparse and lethargic, you wonder why Apple with its own vibrant stores would ever entertain doing business with them. 

The 2009 survey of consumers in 32 countries by the Reputation Institute put telecoms as 4^th lowest of the 25 industries surveyed – just slightly above tobacco, which was understandably the lowest.

What is it in Verizon and other traditional telcos that keeps them from really, truly breaking out and leveraging the wonderful opportunities they are squarely in the middle of?

SAP’s unheralded innovation

Mike Prosceno heads blogger relations for SAP. I must have personally given him a couple of ulcers because of positions I take on this blog. But he persists, invites me to briefings, keeps the conversations flowing.

Stacey Fish who works with him is even nicer. 

So, this morning they send me details about a briefing next week. They plan to use something called  nTAGs as conference badges .

But then the note has an ominous

“we promise the device is not a fancy “shock” collar”

Should I be paranoid? No, because I had blogged about nTAGS last year on my innovation blog, New Florence.

I have come to expect innovation from Mike and Stacey. A level of conversation that does not happen with most other large vendors. Access to their executives which is sometimes heated.

I can tell Mike “don’t BS me”. And he can tell me I am out of line. Believe me that type of conversation is a huge innovation in vendor world.

The “Anti-SAP” Conference?

I am presenting at the Sapience conference next week.

I had heard someone call it “The Anti-SAP conference” before and didn’t not think much about it. But today the Enterprise Irregulars brought it up again and I thought I would put my thoughts in writing.

Call me naive, but I am baffled it is considered “anti-SAP”

I am presenting mostly on how to manage systems integration, application management, hosting, upgrade costs around SAP. Some of these line items have been out of control for a long time, and others look bloated compared to emerging cloud metrics. SAP customers who have no intention of uprooting SAP have every intention in managing these costs (which can make up 70 to 90% of TCO in an SAP shop). How is that anti-SAP?

Ok, so you say Zach Nelson of NetSuite is presenting. Surely, he is sworn to see SAP wither away. Zach is one of the most realistic CEOs I have met. He knows there are business functions, certain locations where SAP customers cannot justify the SAP footprint where he has a shot in the SAP customer base. Will he replace SAP at headquarters in large customers? Highly unlikely any time soon. Ray Wang, my fellow Enterprise Advocate is similarly presenting broadly on SaaS. 

SAP has had plenty to time to offer its own SaaS version to its customers. It is being very selective about who its offers BusinessByDesign. But why is exposing SAP customers to alternatives in a vacuum created by SAP itself considered anti-SAP?

OK, so Seth Ravin of Rimini is presenting. Surely, he would love to get more third party maintenance in the SAP customer base. But if he does, it only confirms that SAP customers are not ready to uproot SAP. They just want a tiered maintenance price. SAP bought his previous company TomorrowNow, and offered a tiered option to Oracle customers, but chose not to do it for their own customers.

Same question - why is exposing SAP customers to alternatives in a vacuum created by SAP itself considered anti-SAP?

Helmuth Guembel, my former Gartner colleague and organizer of the event, consults with a number of SAP customers in Europe. From my conversations with him, many are unhappy with SAP, but few of them are ready to jettison SAP. But the key point is these are living, breathing SAP customers. The theme of the conference is “Alternatives for leveraging your investment in SAP.” How can that be anti-SAP?

I see Amit Bendov from Panaya is presenting – they actually streamline SAP upgrades. I see Steve Zollman from net-net presenting on SAP sustainability. How is that anti-SAP?

I don’t know many of the other presenters or have not seen them in years to know what their “agendas” are. And I will miss most since I am going to the SAP analyst/media summit on that first day. It’s SAP ‘s opportunity to coach me not to be ‘anti-SAP” :)

Gartner-AMR – tipping the scales even more

Gartner is acquiring AMR. Congratulations to my friends there including Tony and Bruce. Tony has always been a gentleman, Bruce a worthy ambassador for the entire analyst community.

But…

…what in the heck is Gartner doing buying a primarily vendor revenue driven firm? Its own vendor side revenues have steadily grown over the last decade.

Why does that matter? Ever been to an industry event where it was primarily vendors? Oh, it’s a good time, but you get that empty, one-sided POV.

From past conversations on this blog and elsewhere in industry, Gartner’s position will be the balance is just fine. After all, this adds less than 5% to our revenue. 

Problem is it was already past the tipping point – and this tips the scale even more.

But hey, it’s their money. I mean it was their money …