SAP did a very nice job bringing TechEd in Bangalore, India to analysts and other registered users around the world. They had a preview for analysts on Monday and had keynotes on Thursday and Friday conveniently timed for viewers who were several time zones away.
There were a slew of announcements, especially around GenAI and other AI , growing BTP product functionality and growing customer base for the development tools.
I was particularly fascinated by the Vector Engine, Datasphere and the Build Code discussions.
Juergen Mueller, the CTO simplified vector talk – which honestly, I mostly associate with pilot communications with air traffic controllers. We live in a 3-dimensional world and vectors allow for representation of many more – hundreds and thousands of - dimensions. As Juergen explained “The embedding function maps semantically similar text to vectors close to each other in a high dimensional space. Running a semantic search, then simply becomes a nearest neighbor search and that vector space with 1536 dimensions. So where it differentiates is you're not searching content, you're searching for condensed semantic meaning.” It should hopefully allow us to go beyond today’s excitement around LLM’s powering text and document-centric sources to include many more structured and unstructured data formats.
Datasphere promises to unify all your data into a single semantic model. Over the years, customers have been exporting SAP data into data lakes. SAP’s delays in integrating many of its acquisitions encouraged some of that thinking. Competitors have also been encouraging customers to bring operational data into their supposedly “more user friendly’ analytical tools. From my early conversations with SAP customers there is plenty of excitement around Datasphere
Build Code brings generative AI and Joule copilot capabilities to ease/speed up development of new applications and extensions to SAP applications. There was plenty of talk around how that would accelerate low and no-code development.
However, reality struck me when Juergen jokingly said “I didn't know if I will have a headache tonight thinking about the space that has more than 1500 dimensions”.
It’s tough to reconcile enterprise complexity with promises of citizen developers. I am hearing similar promises from hyperscalers and IBM that turbocharged DevOps will be the killer app from GenAI. The rapid adoption of ChatGPT has fired up the imagination of every enterprise vendor – we have to make our tools way more consumer friendly.
Like our solar system, enterprise landscapes continue to expand exponentially. After 25 years of cloud applications you cannot find decent choice for most cells if you look at a grid by country/by industry.
I wished I had gone in person to Bangalore. There were TechEd strategy sessions that were not streamed I would have like to have watched. But even more I would have liked to have visited with many Indian outsourcers and tried to understand how they are using GenAI on their own projects.
As an industry we have done several million ERP and CRM implementations, global rollouts and upgrades. Vast number are around SAP products. Which means we have at least 10X the number of artifacts – test scripts, parameter configurations, data conversion code, training modules etc. Can we populate LLMs and generate fairly decent first versions for the next 10,000 or 100,000 customers, rather than reinventing the wheel each time? Can you imagine the labor savings we could deliver?
I did several trips to Bangalore and other Indian and E. European cities in the first few years at Deal Architect I founded in 2003. I took C level customer executives on due diligence trips to many vendor campuses. May be time to start doing more of that.
We are staring at a massively different enterprise landscape. New DevOps tools. And very promising roles for everyday developers.
Time for new approaches.
Burning Platform 108: New Frontiers for Enterprise Applications – Part 2
For the 107th and 108th episode of Burning Platform we hosted Brian Sommer of Techventive.
In Episode 107 he presented on 3 recurring themes he is hearing from customers and vendors - War for Talent, ESG and AI. For my turn in this episode I provide a 25 year retrospective of cloud applications and describe massive untapped opportunities as we Re-globalize, as Industries morph dramatically and customer base migrations scream to be turbocharged
Re-Globalization
Starts around 1.52 in video below
I tackle lots of idle talk around de-globalization, de-dollarisation and de-industrialization of Germany. I discuss how MNCs are rapidly churning their country portfolios. How several vibrant new economies are the new “Tigers”. How static software vendor functionality and global presence increasingly shows them stuck in the “Old World”
Brian explains that global expansion is expensive in the traditional software sales model. The reality is hyperscalers continue to lead the way with massive global investments and a new class of software vendors is more adept at digital channels and will support the changing globe far more effectively
New Industry Landscapes
Starts around 16.50
I discuss how the pace of industries converging and morphing has increased given all the economic shocks of the last few years. Lots of vertical edge applications have become viable and now a new wave of AI use cases is coming which will leverage industry specific operational data.
Brian believes SIs are better positioned for verticals with their account control and large investment mindsets. He says most applications vendors love to enhance their platforms with new waves of technologies. They actually find developing new applications boring; He could well be right.
I believe a new wave of vertical application vendors will emerge. And customers will increasingly build v buy such applications. The reality is one way or another there are major market chunks waiting to be won or lost. Well-designed vertical applications have shown themselves to be very sticky with revenue streams stretching decades.
Customer Base Migrations
Starts around 30.50
I present the depressing graphic that customer bases have migrated at a very slow pace and we have ended up with a “reverse shark fin”
Brian explains that is fairly common tendency with laggards in most customer bell curves. I counter that many vendors have unusually large 50 to 80% of their customers on very old versions. Even the risks of not being in audit compliance or projecting a negative recruiting profile have not motivated them to migrate.
It’s time to leverage GenAI, RPA, accelerators, conversion factories and other automation to dramatically lower the time, cost and risk of such migrations
Every one of the three opportunities I present is massive. However, it will take a fair amount of focus and investment. Who will step up? The next few years should see a lot of churn and chaos. Or if you see the glass as half full, lots of new opportunities
December 05, 2023 in Burning Platform, Global and Vertical extensions, Globalization and Technology, Industry Commentary | Permalink | Comments (0)