Regular readers will be familiar with John Appleby who, in the past, has been a contributor to diginomica on topics specific to SAP and HANA in particular. Now he takes on a new role as CEO Avantra aka Syslink Xandria. The other week, Jon Reed and I held a conversation with Appleby which can be found in our podbean channel. In this story, we provide the background and a taste of that conversation.
Back in 2015, all three of us were at SAP's offices in Palo Alto. Hasso Plattner, co-founder, and chairman of SAP's supervisory board was in full flow bemoaning how long it takes to deploy SAP environments. As Appleby recalls, Plattner said:
I can't believe in this day and age that it costs a thousand euros a day for a BASIS consultant.
At which Appleby wryly smiled and implied it likely costs more - for good ones. Fast forward to today and the same holds true. The reason says Appleby is that there remains an enormous amount of manual work that has to be done every day just to keep SAP systems' lights on. SAP systems produce audit reports, reams of Word documents, early watch reports upon which people are supposed to act. Guess what? With the mountain of 'stuff' requiring manual effort, many important tasks get missed.
All of this just sort of tremendous economy is built around manual operations in SAP that doesn't exist in Google, Microsoft, Amazon or, any of the SaaS vendors. It's just absolutely bizarre that it still exists. I saw this as an opportunity to expand existing Xandria capability into end to end operations.
How does that help the company struggling to make the case for a shift to S/4? Appleby argues that automating tasks which currently consume significant resource goes a long way towards helping with the cost case. But that begs the question - why not sweat existing assets, use tools like Avantra, go to third party maintenance and get an instant (and large) bang for the bucks you're currently paying in support and maintenance?
Here, Appleby is more circumspect. In his view, while the S/4 case is not always easy to make, the bulk of SAP customers will move to S/4 over time. But in his mind, the bigger problem is that of resources for that shift.
If you're making a shift to digital then you'll want to get the most out of existing assets and so I can see a case for third party support in those cases. But that's not going to be enough if you can't operationalize internal operations. What's more, the biggest problem that SAP is going to have over the next 10 years is the availability of people to do these migrations and these upgrades. So it's a bit more than just redeploying them. It's freeing up human capital into the market so that they can do much more important work than creating a daily report.
What about ROI? Here Appleby is forthright. In his view, the days when customers could wait years for results are long gone. His aim is to achieve payback inside a year and preferably nine months. Ambitious? Perhaps. But much more challenging is ensuring that Avantra meets customer expectations.
We're a subscription business and as you guys know, this means you have to first deliver what you say but going forward, customers expect fresh functionality from which they can get more value. Prioritizing for customer needs is a genuine challenge and especially when you have a release schedule of two big releases each year.
So where does Appleby see the biggest opportunity? Here, he refers to the heartland of SAP's customer base in industries like retail and discrete manufacture. But he also says that he sees the greatest pain among customers who have complex landscapes that have evolved over time if, for no other reason than the number of connections between applications grows exponentially over time.
In its marketing, Avantra ties itself to the AIOps meme. Both Jon and I are skeptical about these terms, a sentiment with which Appleby doesn't disagree.
Twenty years ago, my university professor said that AI is bullshit. Have we got past that? Depends. We have some algorithms already that allow you to understand based upon the events that happened in the past. What is the correlation for future prediction? And then we build out suggestion frameworks. Now I make a recommendation to somebody who makes a decision. So, so there's certainly plenty of truth to AI ops in terms of helping humans make better decisions.
As an example, Appleby pointed to the numerous bug fixes SAP releases each year to each of the kernels it runs but which only get patched infrequently.
Most customers, not all, but most only upgrade this once a year on a schedule. And my point of view is that in, in 2020, we need to do better than that if we want to maintain secure systems.
But none of this happens without help from SAP. In this context, Appleby hopes that SAP continues to make APIs available that assist tooling firms like Avantra in adding value to SAP customers.
We've got the beginning of some of this with the cloud platform. They've got some good API now. But I would love to see an API mentality come out of Walldorf such that things can be automated because we're relying upon upon some of that.
As we closed out the conversation, we asked Appleby what he says to customers who are undecided or are sitting on the proverbial S/4 fence.
It's okay if you want to delay S/4, but you should have a plan. No plan is dangerous.
As a freshly minted CEO at a subscription business, Appleby needs to demonstrate that customer care matters. As a long time and very well seasoned person operating in the SAP world, he knows only to well the many challenges SAP customers face. The focus on operational tooling - whether you buy the AI element or not - is something we believe is the right product area at the right time. We know that SAP's Solution Manager, while capable for what it does, is not a magic wand or Swiss Army knife. and neither is Avantra. Instead, we see firms like Avantra as an important emerging segment that SAP should actively support and especially if SAP wants to deliver on the 'customer first' mantra put forward by its co-CEOs.