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SAP Nation: More of the same

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. 

Announcing availability: SAP Nation

This weekend I emailed preview copies of my new book on the SAP economy to select media around the world. I have attached below the “front matter” for my blog readers – the table of contents and the preface.

In time for Black Friday, Amazon is taking pre-orders for the Kindle version here or via their badge on left.

Softcover and other eBook formats will follow. Hardcovers are only being planned for bulk (25+) orders – if interested in that format please contact me.

As with my previous books, I will excerpt portions of the book on this blog as a way of thanking my regular readers. I look forward to your feedback over the next few weeks. In the meantime, Happy Thanksgiving!

“SAP Nation

From its humble beginnings in Germany, SAP skyrocketed to become a global powerhouse and the technology backbone for tens of thousands of enterprises. The economy around it grew even faster, and “SAP Nation” now approaches the GDP of Ireland in size. This book documents both trajectories, based on decades of research and interviews of hundreds of customers, market analysts and competitors.

SAP’s influence has declined in the last decade, as enterprises invest in cloud, social, analytical and mobile technologies and in custom development of “systems of advantage” in their products, channels and business models. Yet, shockingly, customer spending in SAP Nation remains stubbornly high. The model in the book estimates post-recession investment at more than one trillion dollars (yes!).

This book brings out loudly the voice of SAP customers as they cope with this runaway economy. Twenty-five case studies showcase a spectrum of strategies – some are “ring fencing” SAP with Workday, others are switching maintenance to Rimini Street, yet others are insourcing, while still others are evaluating newer SAP products like HANA and acquisitions like Concur.

Part root cause analysis and part strategy manual, this book is a must-read for anyone with interest in SAP – as customer, employee, partner, investor or competitor. It is a fast-paced look at decades of what SAP has done well, and what it could have done better.

Executives everywhere, even those in non-SAP settings, will benefit from the strategies described in the book to migrate inefficient back-office IT dollars to front-office innovation.”

Download SAP Nation Front Matter