This is a guest post from John Appleby, global head of SAP HANA, Bluefin Solutions. He is writing in response to debates around SAP's approach to Fiori pricing. We offer this as a conversation opener and not necessarily representative of diginomica's position.I'm in the midst of a very interesting pilot project right now with SAP that I can't talk about yet, but I encourage you to come to the ASUG Annual Conference on June 2nd at SAPPHIRENOW in Orlando to see the presentation from Aviad Rivlin and I (assuming we get accepted!).
As part of this project, we're moving a copy of Bluefin's SAP CRM system onto SAP HANA, in the cloud, with the Fiori Launchpad for Sales Representative role. This involved upgrading our CRM system, getting Fiori running and then migrating it into the HANA Enterprise Cloud. Interesting times. As part of this, I came to believe after conversations with Dennis Howlett and Jon Reed that Fiori should be free. Let's delve into why.
What is Fiori?
SAP Fiori is a set of business role-based "apps" that sit inside the SAP Fiori Launchpad, which is a container. It aims to increase productivity over the existing SAP products with the Apple iPhone philosophy: offer less functionality, but much easier to use, from anywhere. I've seen it for our CRM system and it is easy to use and slick. Wave 1 was 25 apps, Wave 2 is another 25 apps, and there are a further 4 waves already underway.
The Sales Rep app, for example, provides pricing, create and track orders & shipments, invoicing, account lead and opportunity management. All the basic stuff you need on the move.
So why make Fiori free?
Fiori dramatically improves the user experience
The WebUI screens on SAP CRM are OK, especially for power users, but the Fiori Sales Rep role is much more usable for your day-day users. Plus it is a responsive interface that runs on a Mobile. For other Fiori
Looking at how quickly the cloud players are moving (just look at the next-generation user interface from Workday), SAP needs to get people on Fiori, to protect the installed base from cloud attrition. In addition, SAP needs the good PR from happy customers much more than it needs the revenue from Fiori
Customers do not want to pay for in-situ innovation
Customers pay 22% maintenance for their software in most cases, and they expect to get something for this. Workday provide their new UI for free, which is what customers expect. Now, Fiori does provide benefits and so some customers are willing to pay up, but yet others aren't, and will move to another vendor before paying their existing vendor for innovation in their core.
Fiori doesn't always have a value case
Fiori is $150 a user flat fee, which is small change if you are using one of the bigger roles like Sales Representative. However if you are an employee, $150/user just to do approvals is a huge barrier to entry.
As a result, customers will only buy Fiori when they can implement multiple apps, or to subsets of users.
Fiori will drive end user licenses
I don't have any facts to support this, but it makes sense from a strategy perspective. Fiori Launchpad hosts multiple Fiori apps for a given person. If I'm a sales rep then I could have approvals, accounts, and a bunch of other things. Each of these apps requires some user license of some kind - Fiori is never free.
If users are using Fiori, they will want new capabilities too, and those new capabilities have a sell-on, but only if people are using Fiori. Get customers on it, and get the account team in to sell-on.
Fiori will drive HANA adoption
One of the biggest barrier to HANA adoption is upgrades. Our system was on CRM 7.0, and needed upgrading 3 revisions to do either Fiori or HANA. This was a much more painful exercise than the HANA migration, and it required quite a lot of downtime, testing, rework and code changes. Plus, we haven't done it in our productive landscape because there wasn't enough business benefit.
Making Fiori free changes that equation, because I'm pretty certain our CRM business owner would love to have Fiori (but can't justify paying for it). So Fiori drives the upgrade to CRM 7.0 EhP3, which is also the version that HANA needs. Driving customers to upgrade to the latest version makes driving HANA adoption that bit easier.
SAP has some history of doing this, having provided NetWeaver Gateway free for many scenarios, and creating an Open Source version of SAPUI5, which is the framework for Fiori.
I believe that including Fiori in the underlying user license would be a very smart business decision for SAP. It would protect and drive core user licenses, improve the net promoter sentiment of SAP, and drive Suite on HANA adoption - all of which are key metrics in SAP's business model.
There are people who are paid on Fiori sales who may disagree, but to my mind they should be paid on adoption, because Fiori adoption drives the underlying sales model.
What do you think?
Disclosure: SAP is a partner at time of writing.