The Devil’s “Square”

Michael Krigsman at ZDNet and others like to use the term “Devil’s Triangle” to explain how software buyers, vendors and systems integrators are all to blame for failed ERP projects. In SAP Nation, I dedicated a chapter to the stunning list of failures in that economy, and a chapter to each of those stakeholders in chapters titled “SAP”s Illusions”, “Partner Collusions” and “Buyer Permissions”.

I added, however, another chapter on “Marketwatcher Omissions”. Frankly, I was stunned how so many who should have cried wolf stayed quiet for years. I encourage you to read Chapter 11 in its entirety especially as we enter a new era of hype and promises in enterprise software,  but here are some excerpts:

Regulators

SAP clearly benefits when regulators drive demand for initiatives. In contrast, regulators have not scrutinized SAP much. The EU has gone after Microsoft, Intel and Google for anticompetitive complaints. It has even gone after European telcos around mobile roaming charges. In Berlin, Sigmar Gabriel, the German Vice Chancellor and Economics Minister, “is investigating whether Germany can classify Google as a vital part of the country’s infrastructure, and thus make it subject to heavy state regulation.” None of those vendors have had the financial impact on corporate customers that SAP has had. European regulators have, however, stayed away from SAP, even with its dominant — estimated at 50 percent — ERP market share in German-speaking Europe.

User Group Network

SAP maintenance, which has drawn more of the recent user group focus, only accounts for roughly $10 billion out of $204 billion a year in our SAP economy model in Chapter 3, Neither ASUG nor DSAG have focused much on all the additional “surround costs” in the SAP economy.

Industry Analysts

I was at Gartner then, and we thought Cameron was being sensational for asking customers to exit R/3 even before they had deployed it. Looking back, it was a brave statement on his part. In contrast, now even with the runaway SAP economy, it is surprising how few analysts call for an exit strategy.

Contrast this with a couple of “internal analysts” I know in the technology industry. They work in competitive/sales intelligence for vendors. One is constantly pulling out nuggets from a knowledge base with over 15,000 documents he has been creating since 2000 from public sources. Talk about a “memory” to fact check and help your field. Too bad these “analysts” are not available to the average customer. In my conversations with them, they are frequently appalled at the poor industry analyst coverage they see of SAP and other enterprise software vendors.

Technology Journalists

But, even Kanaracus does not spend a great deal of his time focusing on the SAP ecosystem, other than when they are involved in failures. He says, “Maybe we should also focus on the channel, but IDG has asked me to focus more on SAP and its customers.”

German media is very interested in SAP given its headquarters there, but tends to focus more on its executives and its financial results, rather than its customers. It also reports negatively at times on the growing globalization at SAP. Anexample of that comes from a blog comment by Peter Färbinger

SAP Mentors

In general, though, the Mentors tend to focus on technical topics over economic ones. As Spath says, “I am not the designated negotiator for my company.” Besides, only 20 percent to 25 percent of the Mentors work for SAP customers. The rest work for consulting partners or are bloggers who track SAP.

Bloggers

As we mentioned earlier, SAP was a pioneer in conversing with independent bloggers like the Enterprise Irregulars (the author is a member of the group). The growth of social media has created plenty of content especially in the SAP Community Network. Many of the blogs, however, come from SAP partners, which is hardly independent analysis. Many of the bloggers who follow SAP bring little retrospective and many parse and parrot, and tweet statements from SAP executives. So, the simplification messages that came out of Sapphire Now in 2014 were not met with cynicism about the countless previous simplification statements we pointed out in Chapter 9.

Academic Research

With an annual economy in the range of the GDP of countries like Ireland, and with investments in SAP one of largest categories of corporate capital expenditures, I had expected to find plenty of academic research around SAP.

He listed prior papers he had found in his research — in Figure 2 — and, as we can see, most focus on the impact of an announcement of ERP investments on stock performance, not after the fact analysis of business value from the investment.