SAP Sapphire 2022 Orlando is well underway - but this one is different. We're back on the ground in Orlando for the first time in three years.
7,000 or so attendees is, of course, quite a bit less than Sapphire at its pre-pandemic peak. But this year, Orlando is only the first in a series of regional Sapphire events across the globe, along with a (free) virtual component.
Sapphire isn't short on news - beyond one master press release, SAP literally published a Sapphire news guide, with clickable chapters. As I begin this post, we're now one day in. I'm not going to attempt the futile project of reviewing all the news items. Instead, I'll serve up an opinionated review of a few top stories. My focus? Stories where I chased down details that aren't as widely known. Yep, that's the on-the-ground hustle. In no particular order:
Sustainability is finally getting product traction
Some will recall the awkward keynote of Sapphire 2020 (the first virtual pandemic Sapphire). The sustainability messaging seemed forced, given the virtual audience was grappling with a near-universal pre-occupation with pandemic work disruptions.
But this year, unfortunately bolstered by the unconscionable invasion of Ukraine, the desire to move beyond oil and gas dependence has a new urgency. A tight-margin-economy is pushing organizations to care about bottom line savings. The bottom-line-factor was brought up by SAP customer GE Current Tuesday. When I asked, "Is SAP sustainability push relevant to you?" The answer was yes. The reason? Reduced manufacturing expenses.
Add in the increase in ESG regulatory requirements, and SAP's sustainability messaging has new relevance. However, it must be fully embedded into product to really hit home. Any company can buy SAP's Sustainability Control Tower, now in General Availability - even if they aren't running any other SAP software. The Control Tower can import a variety of SAP and non-SAP data sources (even Excel files). SAP has a growing list of products with sustainability and diversity tracking tie-ins, from Concur to SuccessFactors to S/4HANA Cloud - including the recently-released SAP Cloud for Sustainable Enterprises.
What about SAP customers on older ERP releases? A "green" ledger in S/4HANA ERP will be a welcome add (Christian Klein announced this intention in his keynote), but if you're running an older ERP release, what does SAP have to offer you? I'd like to see SAP organize sustainability industry alliances that don't even require SAP products to participate in, not unlike their Catena-X initiative for automotive. During an analyst session with SAP Executive Board member Scott Russell, he described an energy customer who put it directly to SAP last year: "If you aren't going to be our carbon register, who will"? The customer went on to say, and I paraphrase:
He said, 'Scott, how committed are you to sustainability?' No one has got the capability to do the carbon accounting, the carbon footprint. It's not the reporting. It's easy to report the news when it's already occurred, but the ability, just like we do with economic resources or finite resources. The whole point is the planning and use of finite resources. This time it's the planet's resources, and we need to do it in a way that avoids the problem occurring - before it happens.
BTP isn't going away
BTP's long/protracted history has caused some SAP watchers to write BTP off. Time to reconsider. BTP is centrally positioned in SAP's RISE pitch, and in all S/4HANA migration conversations. After a year, RISE with SAP has 2,000+ customers (60% of those customers are net new). One SAP exec told a reporter that BTP is implicated in almost every RISE project (the number I was told was that 80% of RISE projects involve BTP).
When you hear SAP leadership talk about transitioning to a "clean core," and phasing out code customization, that doesn't mean the end of customization. BTP is SAP's go-to solution for that - for any need to extend SAP. In one panel session today, SAP's Jan Gilg talked about encouraging a hypothetical SI partner: instead of building one hundred separate customizations, do it one time, and put it on the apps marketplace for all customers.
That's a big change; SAP is pushing hard to make it stick. Historically, SAP has not distinguished itself in terms of its free tier development access to BTP (though this has finally changed, thanks in no small part to a very vocal developer community). The reality is: SAP is heavily investing in BTP. That includes educational investments via free SAP Learning Hub courses, and BTP educational offerings via ASUG as well.
Granted, customers have non-SAP options for integration and extensibility. I still find BTP missing from many innovative SAP customer architectures. But BTP adoption numbers aren't small anymore, with more than 13,000 SAP BTP customers globally. As per SAP CTO and Executive Board Member, SAP has now reached 1 billion Euros in annual recurring revenue for the Business Technology Platform.
For the record, I completely agree with SAP's emphasis on a clean core and extending the core apps via BTP - and an apps marketplace. Where I want to see SAP change: support partners to build these apps and get them in front of customers - in particular, give a platform for those ultra-creative smaller partners (and individual developers) who may have design flair and industry expertise, but lack deep pockets for marketing. Put them on stage at Sapphire and TechEd - these upstart solutions are energizing for customers.
It's one thing to hear SAP say 'BTP is relevant.' It's another to hear customers buy into it. In my upcoming piece on Bristol Myers Squibb, they explained why BTP is helping them to move to the so-called clean core. With the ultimate goal: all business applications run in the so-called public/SaaS cloud:
I bought into the basic premise: BTP will help us move the BTS-specific content out of the core, therefore, keeping the core clean... Admittedly, we still have lots of stuff in there, that's for sure. It will take us years to get it out. But we wanted to start down that path, so that someday, we'll be able to actually go to software as a service for the true cloud version of S/4, and get out of the whole hosting and managing other software ourselves, and be able to take innovation faster, because they deliver it four times a year.
My bias: agreed, this is the so-called "true cloud," and it's the long term inevitability in most industries, including heavily-regulated ones like pharma (Aerospace and Defense may be the one exception, where air-gapping may still prevail in some instances). All ERP vendors playing in large enterprise need an answer for this. Patting yourself on the back for getting large customers into a private ERP cloud, even on a hyperscaler, isn't going to be enough. SAP absolutely gets this - it's a big driver behind this BTP push - but we still need to hear more on the public cloud progress (I am meeting with SAP on this topic this week).
RISE with SAP is getting a process intelligence infusion
For a while now, SAP Signavio has been marketed as a "key component" of RISE with SAP, but you could tell from Klein's keynote: something has changed. The emphasis on process intelligence as core to RISE is increasing. Check this from Klein's keynote:
For my own experience working with many customers, a true business transformation will not happen just with a technical IT migration to the cloud. With RISE with SAP, we take you on a transformation journey. No matter in which industry you play, no matter the size of your company, no matter if you are an existing or a new customer to SAP, we're going to tailor your transformation journey exactly to your needs.
So let's start the RISE journey with SAP Signavio, our process management and data mining solution. Seeing is believing. What do I mean by that? I observe in so many IT projects, passive business stakeholders, with systems against change, not enough leadership from the top to make the change happen. With SAP Signavio, we are going to benchmark your existing end-to-end landscape against the best practices and data we collected from over 40,000 customers. And these benchmarks will help you to make the case for change.
I still have concerns over RISE - it tends to come off as THE solution to any SAP customer problem. This Signavio/process emphasis could reduce my other RISE concern: the hard sell. SAP doesn't want to begin a transformation conversation with an aggressive "hyperscaler management" sales pitch. That rings hollow. Starting with a process analysis conversation is much more open-ended. It provides a sense of shared outcomes, rather than pushing a solution (RISE).
Sometimes, it seems like SAP presents the Signavio part of this as an initial consultation. I suppose it can be, but I confirmed this week: to have these process intelligence assessments with SAP, you must buy either a RISE or an SAP Signavio license. On multiple occasions, I've encouraged SAP leadership to consider a free "snapshot" version of Signavio, perhaps packaged with a pre-sales workshop or consult, that would give customers/prospects a foothold on their transformation conversation - without having to spend anything. Think that wouldn't generate leads and goodwill?
Obviously, I left SAP's supply chain and business network news out of this review. That's for another time. Then there is SAP's CX play. I wrote about this right before Sapphire. I'll return after my interviews with SAP CX leadership. SAP's "public cloud" S/4HANA solution is another potent topic - that holds until my interviews today. I'm glad Sapphire is a hybrid event structure, rather than just streaming keynotes. As for how good that virtual content actually is, stay tuned - we have two diginomica team members scouring it now for content substance.
In terms of gripes, I am running out of patience for the SAP catchphrases "transformation as a service" (RISE) and "network of networks" (Business Networks). I don't hear customers using these phrases, or even understanding them. However, when SAP gets into the nitty gritty of solving sustainability problems, that has so much more resonance than handwaving over the metaverse - a catchphrase that is mercifully absent here.
For those whose impressions of SAP Sapphire Orlando are limited to the overly-scripted keynote, stay tuned. There is some solid content here, including customer views (I'll post a customer story next). Next up: a check in with ASUG leadership; I'll ask them about the customer priorities on the ground.
I wouldn't be able to chase down these details without SAP providing open access to their teams and customers. Despite all the changes to SAP's PR and analyst programs, in my case, this access has remained a constant. That's not typical in the enterprise space. I give SAP credit for putting me in the position where I can verify (and share) things that might not necessarily be flattering. But to me, that transparency is part of the change we must all pursue - otherwise customers (and readers) will be left underserved.
Update on Litmos: some may have wondered about SAP's Litmos divestiture (SAP hires adviser for $1 bln Litmos software sale). Talking to SAP Education leads, their explanation is that it was unwieldy for SAP to further invest in the development of two LMS systems. As I see it, the goal here is to divest one, and then focus on getting the other one not only right, but, hopefully, a leader in LMS UX. We'll find out of that pans out, but that's the rationale behind the Litmos sale (Litmos was acquired in 2018 as part of the CallidusCloud acquisition).
Updated, 1:30pm US ET May 13, 2022, with a number of additional items and commentary fleshing out the sustainability and BTP stories - as well as the Litmos update.
Also: Constellation Research's Holger Mueller had me on his video show Friday, where we argued about a number of topics I didn't fully cover in this post, including RISE with SAP adoption, partner issues, inclusion and opportunity, and also Holger's infamous SAP Sapphire exec questions.