SAP Innovation Conference - down with hype, have some reality

Profile picture for user mbanks By Martin Banks February 14, 2016
Summary:
SAP's Innovations Conference set out to show business users the reality of working with the vendor here and now, rather than spout a glorious future yet to come. That does prompt thoughts of whether the wider infrastructure in which it will have to work, here and now, will be able to stand the strain.

Cormac Waters
Cormac Waters

There was an important, if not-quite-spoken, question underpinning the recent SAP Innovation Conference in London.

While many vendors, SAP included, and market commentators have been writing for years that technology is secondary to what it can be used to achieve in business terms, this event demonstrated a subtle, but significant, shift - namely that when it comes to innovation, the ball really now has moved into the business users' court.

SAP's UK MD Cormac Waters set the ball rolling by saying that the last SAP User Conference had given the company a black mark for over-hyping, as Stuart Lauchlan reported at the time. The goal, therefore, was to 'de-hype' the day's events as much as possible, not least because the reality of the changes now occurring in areas such as hyper-connectivity are becoming unavoidable. Waters said:

It is not all hype, it is the real world too. Digital transformation is now expected to generate a $90 trillion market by 2020, and hyperconnectivity is one of the key elements in that happening. It is expected that there will be 2.5 billion people connected by 2020, plus 75 billion connected devices. And the key advantage they can provide businesses is as tools to gain greater customer loyalty, open innovation and resource abundance.

In addition, the effective commoditization of complex software technologies and applications, now possible through their delivery as cloud services, is opening them up to a far wider range of possible innovators, from a far broader domain spectrum than ever before possible.

As Waters observed, there are now 2,000 small businesses developing applications on SAP technology, and in particular S4 HANA, and that was something almost unimaginable five years ago.

Keynote presenter, SAP President of Industry Cloud Pat Bakey laid out the technology underpinnings that SAP now has in place to support user innovation. These are:

  • Building a technology and applications platform that is intended to attract other complementary partners and vendors alongside the SAP product suites.
  • Then comes digital commerce, which has already done much to remove the friction of doing business, and has already spawned the arrival of new currencies such as Bitcoin.
  • Next comes the interconnection of things and increasing hyper-connectivity - ie the inevitable Internet of Things (IoT).
  • Finally, there is the network of networks.

This last is, arguably, still a throwback to SAP's technology base and should rather be called something like 'The Business Service Delivery Platform'. Here, the ultimate service deliverable is 'running the business today', with the implicit understanding that tomorrow it may all change - and the challenge will be to meet that change.

To that end, Bakey pitched it as the compressor of business functionality, making one 'function' comprised of many different functions.

What may trip it all up

Speaking to diginomica later in the day, Bakey addressed some of the issues that will help to make this happen, and in some cases could hinder it. For example the underpinning to the successful exploitation of much of this technology, and in particular here this does mean hyper-connectivity between everything and anything important to a business, depends on external resources being up to the job.

As recent coverage has indirectly shown, the biggest fly in that underpinning hyper-connectivity ointment is BT’s inability to deliver anything approaching the level of broadband service that will be required.

The question that follows is whether companies like SAP will find their best efforts stymied by the UK national infrastructure’s inability to deliver the services they can provide to business. And from the vendor's point of view does this mean those markets, those nations, get demoted in terms of priority? Bakey said:

I don’t think so, We see innovation happening episodically in different places, in large mature countries and emerging countries. It is the same thing around the size of company. Innovation comes if you have educational priorities, or developing a modern workforce.

It would, of course, be a really neat trick if SAP, or one of its partners, could innovate a new way of encoding transmitted data so that traffic densities are compressed to 100th or even 1,000th of what they are now with existing compression technologies. That just might give BT - and other national carriers - a hope, but it is a development effort that the likes of SAP should not have to consider.

It was interesting, if understandable, that Bakey declined to talk openly about the potential negative impact on that becoming possible. But it will be surprising if this is not an issue occupying at least a corner of his mind. In the UK we are inexorably closing-in on a point where it won’t matter what SAP or other vendors offer if  the local internet infrastructure won’t be able to handle it.

The speed with which we get there will only accelerate as more businesses come to realise that achieving the business results on offer no longer requires propeller-headed, pizza-eating IT specialists talking fluent Klingon.

People who understand business can do it. So not only will the data transmission requirements of individual businesses sky-rocket, but the number of individual businesses will as well.

Much of the business management capabilities and improved business agility and performance now being offered by SAP in the form of hyper-connectivity, real-time management over significant areas of business, and the business network – which not only links to information on management and service provision options, but can build the customer’s specific service platform at the same time - now stands in jeopardy as it runs up against the choking hands of the UK’s creaking broadband infrastructure.

But innovation may indeed be the key here, especially if it comes from the user base, as the users will be the ones to understand what their industry sector really needs in terms of business and infrastructure services, as Bakey acknowledged:

Because of our heritage and expertise we have a role in providing the catalyst of that innovation, not the  full source, that would come from those using the catalyst. From that we see an exponential rise in value coming from customers that are innovating, partners that are innovating and SAP. We don’t control that, but we enable it. Control retards innovation.

So what more needs to be done in scaling up the technology compared to scaling out the distribution of business solutions that could be customer to customer sales through the network? Bakey concluded:

We’ll always be scaling up. But the scaling out comes from the ecosystem and the platform. We have tripled our addressable market in three years just because out technology can be used to identify business value, solving business problems or enabling new partners. Our position as the enabler is more attractive that the history of where we came from.

My take

The conference served to show two factors that are now becoming inextricably intertwined.

One is that vendors are understanding that their technologies are great enablers, but not answers.  Answers must come from the user community.

But the other is that those answers may - probably will - find themselves choked by the ability of external infrastructure resources to deliver what is required.