Somebody asked me recently if SAP was surprised by the many customers who spoke out loudly in the two volumes of SAP Nation. I said I did not think so – I had been telling SAP executives in person about the issues for years. They were unable or unwilling to manage the runaway economy that has grown around its on-premise products.
If anything, I was even more discouraged in 2015. The massive cloud investments SAP has made (acquisitions of SuccessFactors, Ariba etc) in the last few years are not changing the company’s revenue mix dramatically (prelim 2015 numbers show cloud revenues at 11% of total, up from 6% for 2014). A majority of its new S/4HANA customers are NOT looking at the cloud option. They quote immaturity of SAP’s cloud, no migration support for previous customizations, and the confusing rollout of S/4 functionality.
Mercifully, SAP has started to de-emphasize “Simple” in its product naming, but the branding genius has replaced that with intuitive names like “edition 1503” and “1511”. In a humorous note, Kuen Sang Lam helpfully suggests they add the auspicious Chinese number 8. (btw, I was rolling on the floor when I read his comment cautioning early adopters “I have eaten “fugu” and it was great, but I was the number 259,366,487th person who has eaten it and staying alive to tell you about it here.”)
Before you try to figure out if 1503 or 1511 were picked because they are prime numbers, save your brain cells to make sense of this note by Monika Patel about what’s in and not in “1511”. I bet every CIO is clamoring to try out that fugu!
End result – SAP will continue to be an on-premise, Business Suite haven for years to come. Nothing wrong with that, if the economy around that was not running at over $ 300+ billion a year. In fact, it is music to the ears of SAP’s traditional partners.
Barring some miracle, I do not expect SAP to do much better in 2016. What that means is customers will have to watch out for themselves and accelerate the 9 strategies I described in SAP Nation 2.0 – ring fence SAP with clouds, 3rd party maintenance, two-tier ERP etc. to shield themselves from the continuing-to-run-away SAP economy.
Like I said – more of the same.
