In any other week SAP’s plan to acquire hybris would have probably attracted more hi-profile mainstream media attention than it has done so far.
In the event it was somewhat overshadowed by Salesforce.com’s $2.5 billion price tag for ExactTarget. Yup, size really does matter.
But now the dust has settled a bit, it’s worth reflecting again on the SAP move as it does carry with it some potentially market changing implications, articulated starkly by co-CEO Bill McDermott when he (almost) channels Russell Crowe in Gladiator:
“We fully intend to unleash the will of SAP on the CRM marketplace.”
OK, at a time when Marc Benioff is trying to turn Salesforce.com into The Customer Company and boasting on every possible occasion about about knocking SAP off the top spot in the Gartner Customer Service Magic Quadrant, that’s probably a pardonable bit of sabre rattling from the German camp.
But away from the rhetoric, what does it mean in practice? McDermott argues that it’s all about the pivotal role of the digital customer:
“CEOs today [are] working very hard to enable a 360-degree customer relationship. They’re leveraging sales, services, marketing and e-commerce across all channels, and this has to be done with intimacy because today’s digital consumer will not tolerate anything less.
“With hybris, SAP has everything that a CEO needs to run a corporation in full intimacy with their consumer. Just think about all of the industries that we can serve and just think about industries like retail, consumer products, high tech, telco, media, financial services now having a true digital relationship with their consumer in every single channel, where they can make precision retailing, real-time offers, loyalty offers, all on the fly.”
And back to the sabre rattling again just in case they haven’t got the message over at Salesforce.com:
“We’re here to take over the CRM marketplace.”
Ariel Luedi, CEO at hybris, is more keen to play up the omni-channel capabilities of a combined SAP CRM and hybris worldview:
“Hybris has never been used in isolation at the customer side, so it makes no sense to have them in isolation within SAP. So all these examples I gave you, a commerce platform has an incredible deep integration layer to many back-office systems.
“For instance, Nespresso is a very deep integration into SAP CRM, where the 20 million loyalty customers of the Nespresso club are being managed, and we access them in real time to provide an incredibly great customer experience on all the touch points, which are hybris-based, which is mobile, call center, the web and in-store as well.”
But while a lot of attention has been paid to the CRM aspect of the merger, there is also an ecommerce play and that’s prompted a swift marketing back blast from NetSuite, which has bet a large chunk of the farm on Commerce-as-a-Service.
Craig Sullivan, Senior Vice President, International Products, is rattling the NetSuite sabre on this occasion:
“SAP is running scared. They know they are ill equipped to make a meaningful impact in the cloud market.
“They’ve resorted to their standard practice when they don’t know what to do: make an acquisition to plug a gap rather than supplement a core strategy.
“All the best to them with integrating yet another new set of applications and services into the hairball of their already complex product offering.
“In the meantime, we’ll carry on building on the 3,000 webstores already live on NetSuite and evolving the powerful SuiteCommerce platform we launched last year – a natural extension of our core business application, not an acquired afterthought.”
Beyond the inevitable competitive sword play, what do more independent voices think of the SAP-Hybris tie-up? Over at Forrester, Peter Sheldon notes:
After repeated false starts of trying to build its way into the enterprise ecommerce space, SAP has finally decided to do a U-turn on its strategy and buy its way in. For years there has been intense speculation that SAP might acquire hybris, and behind the scenes there has certainly been much umming and ahing over the enterprise software giant’s commerce strategy.
The lack of a credible enterprise commerce platform has made it hard for SAP to compete against its arch rivals IBM and Oracle, which respectively have invested billions of dollars in their own eCommerce acquisitions over the past three years. This situation simply came to a boiling point. SAP finally reached the conclusion that catching up via a build strategy was not working.
Sheldon approves of the decision to run hybrid as a stand-alone business, arguing:
There will be no forced dependencies on SAP’s existing ERP and CRM product lines, which will ensure that hybris continues to be an attractive choice for customers regardless of their current flavor of ERP or CRM back-office. Over the next 18 months we can expect SAP to make significant investments integrating the hybris suite with ERP and CRM, making it easier for existing SAP customers to use hybris in an integrated fashion.
At Constellation Research, Holger Mueller sees the hybris acquisition making more sense than some others, citing SuccessFactors as a case in point, but argues that SAP will face stiff integration issues:
The challenge for SAP’ is, that it does not have a viable integration platform. HANA Cloud Platform is too young and faces many other challenges. NetWeaver PI is coming around these quarters – but the main question is – where to integrate to – the Business Suite classic or any brand new HANA based products.
Mueller observes SAP execs did hint that hybris will be re-platformed onto HANA, but argues that this wouldn’t address every issue:
Putting hybris on HANA maybe straightforward for hybris – but will create even more integration needs for SAP – as the data to run a multi channel e-commerce system like hybris will have to come out of the Business Suite. Which technically could run on HANA -but even in that case data needs to be accessible for hybris, and not only will data flow to hybris, it will also need to be written back.
But he concludes:
Moving hybris to e.g. HANA is a simpler scope than moving SuccessFactors. I bet if SAP wanted, hybris could run on HANA before SuccessFactors. But SAP needs to address the integration roadmap quickly and execute on it. Once more like all things product at SAP these days – it’s all about execution.
The war in heaven
The wider implications on the competitive landscape will of course take time to level out, but some commentators now argue that the current enterprise commerce landscape boils down to four leaders in the form of SAP, Oracle, IBM and eBay with the likes of NetSuite and DemandWare gearing up to challenge the status quo.
All of which lends increased mainstream credibility to Commerce being on a par with CRM and ERP as a core business application category – an argument made vocally by NetSuite over the past year – and suggestive of the opening up of a new front in the ongoing marketing ‘war in heaven’ - or more accurately perhaps the ‘war in the cloud’.
With the unescapable ‘Coming right back at ya, Benioff!’ undertones of McDermott’s comments on SAP’s plans for the CRM marketplace, it’s difficult to avoid the conclusion that things are about to get feistier than ever on the CRM front as well.
For all the more moderate messaging about co-existence with SAP that have been aired of late, I find it hard to imagine Benioff taking what is tantamount to a renewed declaration of war, lying down.
All of which will doubtless be tremendous fun for those of us watching the markets – even if it can backfire to some degree – but many customers might be forgiven for fearing yet more vendor-bashing.
We’re clearly at a variety of tipping points across various markets now. It might be nice if all concerned could avoid hybris hubris this time around.
But it is perhaps the curse of living in interesting times?
Disclosure: at the time of writing, SAP and Salesforce.com are premium partners of diginomica.