I’m currently up to my neck in SAP TechEd 2020, absorbing as much as I can about the future direction of SAP. TechEd is a good time to drop in on some topics that are not front of mind and see what SAP has been doing. The answer seems to be quite a lot.
As a backdrop, much of my recent professional time has been directed towards how customers adopt S/4HANA. But TechEd has reminded me that similar decisions need to be made across the entire on-premise SAP landscape for integration, infrastructure, user interface, and business intelligence. And all that's before we think about advanced technologies like machine learning, RPA, sensor technology, and other shiny stuff.
The dilemma I see for customers is that while all of the above will be supported in mainstream maintenance until 2027 or out to 2030 if you're prepared to pay a premium, customers that want to see new and modern products need to move from existing and largely on-premises components to the new cloud offering from SAP...or other vendors. And they need to action those decisions sooner rather than later.
This last point is a dilemma for SAP as they try to show customers that migration from one SAP product to another is easier/cheaper than looking at the competition. This wouldn't be such a problem for SAP if the vendors who they partner with to reduce infrastructure costs (the hyperscalers) were not also the vendors who are offering new and cool products in the cloud. In short, the Big Bad Wolf is already in the house pretending to be Grandma.
What does a CIO who is being pressed for results do? Do they back SAP and move to the Business Technology Platform (BTP) offering or look further afield?
As you might expect the answer is a big fat "it depends" and that must be assessed across the classic three key dimensions of People, Process, and Technology……..
Until we get our first AI CIO, decisions are made by people. In organizations where the IT team selected SAP, run the SAP system, and are given time to learn SAP stuff, it is more likely that they will understand what the new capabilities of SAP BTP offer, and they will promote these internally. This internal support for any product is key to its success (or failure) and this is why the free tier that SAP has promised is key to helping customers make the case for the transition to SAP BTP. After all, if IT can spin up a free instance to demonstrate how SAP BTP works then they already have a head start. However, for organizations that have given the implementation/run of SAP to a third party, they often lack the internal knowledge of how everything fits together and how it can be evolved. Many run contracts are written based on the lowest cost, not the highest levels of innovation. So the third party may not promote new ideas from SAP or anyone else for that matter. They have to run a tight ship so staff training may be limited. This is fertile ground for the cloud-native players to promote alternatives to SAP BTP. For its part, SAP needs to find a way to get partners on board with their offering, but this can be difficult when they also have a foot in the camp of the hyperscalers.
If the cloud is about doing the same only cheaper, some of the tools available from SAP to help lift and shift your investment to the cloud make a lot of sense. However, if you are looking to digitally transform as part of this process (e.g moving to real-time integration from file-based) then tools to move are of little value because you are going to start again in the cloud. So if a CIO looks at what she has in SAP Portal, SAP BW/BO, and SAP PO/PI and likes what she sees in terms of support for the digitally transformed business then SAP BTP will make sense. If, however, she wants to rip up the rule book and start again, then that blank canvas can carry any vendor logo. With the hyperscaler wolf in the house offering free proof of value here and there, it is absolutely key that SAP does the same, just to remain perceptually competitive.
Like the nerdy kid at a party, SAP desperately wants to be cool but somehow can't convince the audience. I know developers outside of SAP who would move mountains to avoid using SAP creating some bizarre architectures that work around SAP or ignore it. I don't think SAP has helped themselves by continuing to position ABAP at the center of their universe. I know that the ABAP of today is different from the ABAP of the '90s but not many of the developers outside SAP would understand that distinction. Partners are also a problem for SAP. Here, they often do things "the way they always have" which gives customers a poor view of how "cool" SAP could be. If you layer on top of this the availability of skills in the hyperscalers products and the ease with which they can be adopted, it is easy to see why some CIOs are considering a switch. At this level, infrastructure technology is seen as a commodity. SAP will play the content card here to show that their tech stuff works better with other SAP stuff. But in a world where standards have evolved, that story doesn't resonate as well as it did in the past.
As with the decisions about moving to S/4HANA none of the options in front of a CIO is without complexity - do nothing and fall behind, go all-in with SAP and learn lots of new skills or use this as a chance to pivot to other technologies?
Each path is difficult. Previous experience with SAP, the current team biases/experience, and ease of adoption (aka free tier) will all play their part and what is right for one component may not be right for another. My main concern today is that while looking outside the SAP tent may be tempting, CIO's must be careful that they don't end up throwing the proverbial baby out with the bathwater. That is a real risk.