As background, guest author John Appleby aired this topic back in February to a 104 discussion thread. Most of the comments were in favor of Fiori coming as part of SAP maintenance.
It should therefore be no surprise that Kanarakus reports the American, UK and Ireland and German SAP User Group representatives all expressed concern on the topic to varying degrees. Here's the interpreted summary:
- America - we don't like it but we will work with SAP to resolve issues. (result? nada - this is golf course talk)
- UK - we don't like it but we'll run a survey to confirm (result? Group talking point at annual user conference in about 6 months)
- Germany - we don't like it and we think this is part of maintenance. (result? Watch out for venom in the German speaking newspapers and a stand off that might well get a result in users' favor.)
SAP for its part will pick off customers where there is extreme UI pain.
Right now, this is almost an exact replay of the previous price hike maintenance battle fought in 2008-9 where the only concession that was drawn from SAP was an effective deferral of a price increase that would put them on par with Oracle pricing albeit in delayed fashion.
Can SAP truly claim 'new functionality' and therefore extract a price for Fiori? This is highly debatable. In recent weeks, I have seen some solutions that leverage Fiori to good effect. But in my mind, these only solve problems arising out of past sins. They don't provide anything fundamentally new that you could claim carries value in the sense that SAP tries to talk 'innovation.'
A key insight into SAP's thinking comes from this piece in Kanarakus' article:
“It’s a value question at the end of the day,” said Adi Kavaler, global vice president of UX products strategy and go-to-market, and SAP Fiori chief solution owner.
While Kavaler has a great deal of respect for community members who have protested against the Fiori pricing, some of their comments “read for me like an emotional response rather than getting into a very specific conversation about what the value is,” he said.
For example, “people are perceiving Fiori as a UI only,” Kavaler said in an interview. “This is one thing that is inaccurate.”
“It is not simply some newly painted or rearranged screens,” he added in a follow-up email. “Fiori is a brand-new product and future-proofed architecture that is a retrofit on top of 20 year old UI technologies. We have refactored the code to separate the business logic from the client code and created a clean interface (Gateway) for future innovations.”
Putting my CIO hat on I call BS on this logic. Much of what I have seen are 'newly painted screens' and I don't buy the futures argument without some very clear understanding of what that means. In other words, don't blow smoke at me, show me the path to value I can understand.
There are two more dimensions to this that SAP misses and over which it trips up badly:
- Let's assume you can call value from Fiori - that has never been adequately explained. Where are the product marketers who can line up Fiori app bundles and point precisely to something new beyond the technology for which there is free (ie part of maintenance), some price and premium? No-one cares about tech. They care about outcomes. They pay for differentiated outcomes. They don't pay for lipstick on a pig.
- SAP cannot avoid the market comparisons with cloud players who bundle UI improvements and even Oracle, which has recognized the value of extra licenses from simplified casual user usage.
Informal conversations with SAP user reps suggest there is high demand for Fiori and they will pay - for the time being. But this will come at a price to SAP.
The user groups do not speak with one voice but this is not something over which SAP can take advantage. The fact the American UG (ASUG) is calling for cooperation is a new dimension that could end up carrying great weight. But it won't be easy for ASUG to persuade the other UGs that it is sufficiently independent of SAP as to be trusted to speak with the same degree of vigor as their German counterparts for instance.
The days when the company could count on it being embedded to the point where customers cannot leave are largely over. There are pieces of the SAP pie that customers will need to keep for years to come but there are plenty of pieces for which SAP has strong competition and can be replaced. We've seen that in CRM and HR. We are starting to see it happen in BI. Ariba is not the done deal it could be in the hands of SAP. And for all the cloud success SAP currently enjoys, it is the core it is fighting to protect. A priced Fiori is not the way to win that war.
The ASUG position is interesting. While members may not fight overtly, they will walk away quietly. They will play the passive-aggressive game to its fullest. This is perhaps the most dangerous element of the current battle from SAP's perspective. In the past, alternatives to SAP support were almost non-existent. Today, customers can go to RiminiStreet and others. They can get their Fiori licenses and then save later by switching for support. They can swap out chunks of functionality for alternatives, cherry picking those services they wish to retain from SAP but ultimately squeezing SAP as much by way of punishment as economic choice.
The irony is that this is an unnecessary battle with little upside for SAP. Even if you believe (and I don't) that Fioir is a $500 - 700 million one time opportunity for SAP, it pales into insignificance when measured against the potential attrition rates in both maintenance and functional components that could be sold. Look at how much money Salesforce and Workday alone have taken off the enterprise table with comparatively few enterprise class customers. Imagine what they could take off the table?
In summary, I see this as a self inflicted wound that SAP needs to patch up - and quickly. Customers will thank them for it and pay more, further down the line, once the SAP value proposition is clear and apparent.
Disclosure: SAP and Oracle are both partners at time of writing.