My friend Dennis Howlett has written a post with that title. WTF you may say – different markets, different species. Not really. My next book focuses on the “technology elite”. There are user organizations, consumer tech companies, enterprise tech companies profiled.
Against that wide palette you get to cut across categories and look at multiple elite attributes. I thought it would be interesting to go back to my research on Apple in the book and find areas where SAP may be able to evolve. The sentences in italics are extracted from the latest edit of the book.
Measure yourself based on new product revenues
Apple gets about two-thirds of its revenue from iOS devices, a platform that didn’t exist four years ago. In contrast, SAP revenues from HANA, BYD, even SuccessFactors will likely not even be 10% by end of 2012. SAP could start right there. It has to be willing to throw out the old, not continue to milk that maintenance.
Quit thinking only like a software company
You look at SAP executives, and you see impressive software backgrounds. But little with hardware (clearly important as it focuses on in-memory and cloud offerings) or experience from other disciplines. Apple put together a remarkable diversified team of executives. Three examples:
- The London Daily Mail asks, “Who is the most valuable Englishman
on earth? Wayne Rooney? Colin Firth? Neither gets near Jonathan Ive, the boy from Chingford who is now senior vice president of industrial design at Apple.” - In the 1990s, Apple made a strategic decision to deemphasize its own manufacturing. Metrics such as inventory turns did not look impressive especially when compared to Dell, which was then a paragon of efficiency. Plants in Ireland, Singapore, and United States were outsourced. Tim Cook, now Apple’s Chief Executive Officer, gets credit for that supply chain transition.
- Apple, of course, has gone from strength to strength with its retail
operations, as we describe further in Chapter 12. Over 230 million
visitors entered one of Apple’s over 300 stores around the world in 2010. In the ultimate compliment, Apple’s SVP of Retail, Ron Johnson was recruited in the summer of 2011 to become CEO of J.C. Penney.
Become much more vertically influential
Five years ago, I would not have said this. SAP was/is the backbone in many industries. But if I ask the question, did SAP really change them, the answer is mostly no. Apple on the other hand has shaken up multiple industries.
- It’s tough enough to develop a dominant business model in your own industry as Apple has with its iPads. Try bringing along the music industry with a single song model as iTunes did starting in 2003.
- ..when the iPad was introduced, Apple actually managed to convince book publishers to increase e-book pricing beyond the market standard being set by Amazon.
- Prior to Apple introducing the iPhone, carriers paid device manufacturers just enough for “planned obsolescence,” and subsidized those devices to consumers. This allowed them to lock customers into another long-term contract….Now as Apple
expands its carrier choices—AT&T, Verizon, and Sprint in the United
States—the mobile service becomes the commodity in this changing
business model.
Become much more global
Five years ago, I would have said this even less. SAP had/has global staffing, global customer bases. Apple has blown by it.
- “Well-off clientele (at a spa in Germany) and always totally global: Egyptians, Russians, Israelis, Lebanese, the Stans, smatterings of everywhere else, many Europeans and rarely an American. The universal adoption of the iPad this year is incredible—everyone has one, ages 25–70. People are doing mail, checking local newspapers, getting news from home, but this is not a surfing/gaming crowd. Reminds me of last year’s universal adoption of the Stieg Larsson novels, when everyone was reading the same book in different languages.”
- The (2008 iPhone 3G) rollout required coordination with telcos like VimpelCom in Russia, Etisalat in Dubai, and Telia in Sweden, which many of us have never heard of.
- “The major producers and suppliers of iPhone (the first one in 2007) parts and components include Toshiba, Samsung, Infineon, Broadcom, Numunyx, Murata, Dialog Semiconductor, Cirrus Logic, etc. All iPhone components produced by these companies are shipped to Foxconn, a company from Taipei, China located in Shenzhen, PRC, for assembly into final products and then exported to the U.S. and the rest of the world.”
Rethink partner/ecosystem strategy
The more than 600,000 (as of November 2011) and growing applications
in the Apple App Store range from the sublime to the silly (the book has several examples). But the sheer size of the marketplace is a formidable Apple asset. The head of iOS development, Scott Forstall, has commented that Apple has, in the iOS App Store, “created the best economy in software in the history of the planet.”
Besides its impressive size, the Apple ecosystem is mostly made up of small firms and entrepreneurs. SAP continues to rely on its larger SI/outsourcing partners even with mountains of data around their project overruns, overpriced hosting and application management. Also, there is nowhere near the productivity in incremental, new applications.
There is plenty more in the book about Apple. And Google, Facebook, HP. And Corning, 3M, UPS and many other “elite” companies. When the book is out maybe we can compare SAP to the others. SAP would show well against many of them. But it would also need to evolve in many other directions.
