Cowbell and Application Vendors

I was chuckling to myself as I was watching SAP’s "Unleashed" presentation last week. I kept getting flashbacks of the SNL skit from the 2000 “More Cowbell” featuring Christopher Walken, Will Ferrell, Jimmy Fallon and others (see video below). It was recently featured as one of the top 10 skits over the 50 years of the show.

As a subtle part of a song, a cowbell can add a nice cadence. However, it can quickly get annoying – even hilarious as it does with Ferrell’s energetic playing.

Application vendors have a similar distraction. I have an acronym for it -“PAID” for Platform, Analytics, Infrastructure and Databases. Customers pay them for business functionality, and appreciate PAID as an underlying element. But vendors often get carried away and focus a lot more on PAID. Some of you have heard me say it is the equivalent of going to a Michelin Star restaurant and instead of being served a gourmet meal with a personal visit with the chef, you are shown to a buffet of ingredients and told to grill them yourselves.

SAP last week featured its Business Data Cloud and partnership with Databricks and the Joule agent builder. Both nice for a product demo, but does that deserve the moniker of “Unleashed” from the world’s largest enterprise application vendor and a kickoff from the CEO to a global audience? I shudder at the thought of SAP going back to a phase not long ago where HANA became an obsession for the company, and applications an afterthought.

Not just picking on SAP. If you look at Salesforce, their biggest acquisitions have been Slack, Tableau, Mulesoft – tools, not applications. I have called Oracle and Microsoft enterprise application “underachievers” – you should buy databases and hyperscaler infrastructure capacity from them, not domain expertise in form of business applications.

I cannot tell you how many application vendor execs say they want to become “platform vendors”. No wonder so many industries and geographies have so little choice in applications. I saw that in the 1980s when I had to custom build for clients functionality for multiple spouses in the HCM software sold in Saudi Arabia and when we tried to do oilfield cost allocations using a GL in the Netherlands. Even today, you cannot find many vendors who would support those and countless other needs.

Three decades after cloud applications started to show up in the enterprise, 75% of the 2x2 grid of applications by industry and geography is still pretty empty. Similarly, you can find plenty of AI use cases for SG&A, back office functions, but not a whole bunch in the COGS, operational areas. Vendors just do not have the relevant domain expertise or sufficient relevant data to train their machines.

Tone down the cowbell and PAID, folks. If we don’t build business functionality, customers will custom develop it. Many already have. We appear hellbent on shrinking our addressable market.