In time for Labor Day weekend reading, Amazon is launching 2.0 on Kindle today. It is starting to show up in book stores (print on demand at CreateSpace ). As with previous books, I will be excerpting 10% of the contents over the next few weeks.
2.0 looks at the prospects of S/4HANA which SAP launched in February of this year. Chapter 1 looks over 10 pages on the SAP landscape in which S/4 was introduced
- SAP’s runaway success in the ‘90s came about because its R/3 product dramatically reduced enterprise sprawl…Today, SAP’s cloud competitors are using that very argument against it. Dave Duffield, co-founder of Workday likes to describe having customers on a common code base as the “power of one”. Zach Nelson, CEO of NetSuite touts “one product for many industries”.
- SAP’s product portfolio has exploded, and in the last decade there have been nearly 50, seemingly disconnected acquisitions. That has led Mark Hurd, CEO of competitor Oracle (itself very acquisitive), to sarcastically observe,”I guess we could buy a Dairy Queen.”
- Next, there is the sprawl around SAP’s core applications at its customers. According to Panaya a tool vendor “More than 50% of SAP shops have 40+ satellite applications. Of these less than 10 are SAP applications.” CAST Research Labs has analyzed customizations at several major SAP customers and found most of the customizations were sizable, with many of them high-risk, according to its benchmarks.
- Finally, there is significant growth in the partner ecosystem. At its Global Partner Summit this year, SAP announced it now has 13,000 partners—a five-fold increase in the last decade
- The wide diversity in SAP’s portfolio and its customer base is vividly on display in its advertising budget. This runs the gamut from radio spots promoting the Concur product to small businesses, SuccessFactors billboards at competitor events, corporate branding at hockey stadiums, three-page spreads in The Wall Street journal, hot air balloons and HANA commercials which ask “Can a business have a mind, a spirit, a soul?” It would appear every taxi driver, sports fan and New Age practitioner who can influence software decisions is being targeted. This marketing carries over to social media where SAP executives and fans rave about individual products as if they represent the whole SAP economy
- On this side of the pond, in a patriotic July 4 (U.S Independence Day) guest column titled, “A nation of underdogs,” McDermott wrote:
“From equal tights activists to entrepreneurs, our nation’s history is rife with stories of people who believed the impossible was possible. Indeed, a notion that an underdog can win—whatever his definition of winning may
be—is part of our country’s DNA. It’s a truism I know firsthand.”
- McDermott could inspire the “underdogs” in SAP Nation to tackle the sprawl challenge. With his sales background, he has proven his ability to generate new revenue. The SAP economy, however, does not need more selling. The economy needs "un-selling”—delivering on previous promises, lowering prices to reflect new market realities, and more predictable results. If McDermott can pull that off it could be his lasting legacy at SAP. Dr. Plattner has certainly raised expectations with his own “end of history” statement. After introducing the next-gen product, S/4HANA in early 2015, he told a journalist, “If this doesn’t work, we’re dead. Flat-out dead.”
