The last few years, SAP has had almost nothing to say of substance other than presenting its report card for HANA related progress. Sure, it has dutifully followed the buzzwords du jour and shown examples of social, mobile and analytics solutions but these have been a side show to the general HANA push.
This year SAP will refine its S/4 messaging by encouraging buyers to get on the S/4 train through example. That hasn't been easy although in the latest briefing, I'm told 170 customers are now live on S/4 with more than 800 additional active projects where the customer has committed to S/4. I am also told that the number of S/4 projects recently overtook the number of other HANA related projects following the release of 15.11.
This time I believe SAP will roll out customers willing to talk in depth rather than around what's happening. We plan to have some of those customers on our JD-OD video couch.
The concentration of questions for the cognoscenti will come around S/4 HANA in cloud environments but that isn't how customers should exclusively view S/4.
Instead, we think that customers should listen out for messaging that clearly points to the circumstances in which they should consider S/4 rather than the intermediary Suite on HANA step and the reasons for taking specific deployment options. To that extent, I am looking forward to hearing from customers who are advanced in their thinking about the digital journey they are on and how that is playing out. Hopefully, this will start to answer some of the doubts that are expressed in user group surveys, of which the most recent from the UK & Ireland SUG was particularly worrying.
The latest earnings call should also tell you that SAP will pound the broader cloud drum, talking up SuccessFactors, Fieldglass, Ariba and hybris. Those are done deals but even so, will grab attention. Ariba in particular is interesting to us because from our perspective, that business unit has almost been invisible the last couple of years. On a pre-briefing, we learned the company has made significant advances, especially around the on boarding of edge case suppliers that would not normally warm to the Ariba proposition. I also heard about interesting initiatives designed to streamline transactions across the financial supply chain. It is perhaps telling that SAP Ariba has put on extra sessions due to being sold out on the original programming.
Having said that, I am more excited about other things upon which I have been briefed.
For the first time in many years, SAP is pumping some serious marketing into Business ByDesign. It is devoting a full day to the topic but away from the main 'tent' area and in advance of the main show. This is the right thing to do because SMBs, at which BYD is aimed, are easily intimidated by the gargantuan show floor that is SAPPHIRE.
There will be sessions covering the mid-market positioning and 2-tier ERP for the subsidiaries of large enterprise that want an SAP landscape across their groups. I will be delivering a session (for which I declined compensation) that is aimed at talking about the issues SMBs face both now and into the future, explaining why, in my opinion, the time is right to seriously consider a shift to cloud. Hint: mid-market customers in particular have been under served for cloud operations with limited options. However, every industry I look at is undergoing fundamental change and in my view, cloud gets you the kind of running start needed in the back office with which to derive value across the whole business. Combine that with the spaghetti soup mess we often see in existing landscapes and a shift to a cloud based suite just makes sense. I'll be explaining why in my session.
As a long time supporter of BYD, I still believe in the solution's value. I have been given a preview of some of the new capabilities and BYD's UI makeover. They are pleasing and sensible upgrades coming later as GA. BYD now takes advantage of HANA and performs at blistering speed, something that was a past problem.
Sticking with SMB, expect to see a splash around SAP Anywhere. Late last month, I was given a preview of this front office retail solution that is being developed out of China on a fresh codeline and from a blank sheet of paper but which has integration points to BYD and B1 and is built on HANA platform.
What I've seen is gorgeous, correctly positioned and functionally solid. It's also well priced for the retailer who is looking to build omni-channel capability and is interested in taking advantage of prebuilt multiple touch points. I'll have more to say once we've met with customers but in the meantime, Phil Wainewright has a more complete write up.
SAP has what I call an ad hoc projects team that searches for new opportunities that take SAP technology and applies them to gnarly problems that have to work at massive scale. This is not dissimilar to what GE is doing with its software division. Again, I've seen some previews that address downstream like oil refinery operational problems and which help refiners/distributors break the production black box by tapping into the sensor data those systems generate.
The solutions on offer provide predictive maintenance information for situations where markets are volatile. There is some discussion about how much value these solutions deliver and I'd like to know more about productization but again, I am told we will get to meet with customers so watch for the commentary and video feedback.
Finally, SAP's digital store will get some airtime. SAP is developing the store using consumer trading principles. CRM on demand for example recently saw a price reduction to €23/user/month. I questioned the wisdom of this decision but was told that while it matters not for most of the western world, SAP wants to be competitive globally while maintaining a single price. No differentiated price based on geography.
This should help SAP be competitive in markets where price sensitivity has made adoption a challenge while supporting sales calling in wealthier markets. The digital store is now home to 23 solutions that are only available online and for which there is no sales team. SAP will establish a telesales operation but that is designed to handle volume and the inevitable WTF happened when a sale fails for some reason.
SAP has 'one more thing' up its sleeve about which I am sworn to secrecy because it hasn't been through the legal grinder. If SAP does announce at SAPPHIRE then it will rock a lot of SaaS providers and specifically those looking at real time intelligence. It also has the potential to be a monster in terms of sales value. Beyond that, my lips are sealed.
On S/4, my pre-briefing with Bernd Leukert, who has executive board level responsibility for all engineering, helped clear up a number of misconceptions around S/4 and especially around the way S/4 is having differential impact on the businesses where it has been deployed. This is something that SAP marketing needs to grab with both hands because what I am hearing today in terms of benefit makes perfect sense except for one thing - nobody other than a few know much about those outcomes. That emphasis on outcomes plays directly to buyer expectations so to hear the detail from Leukert - a self confessed technologist - is both refreshing and welcome. In short - c'mon SAP Marketing, up yer game!
What I've heard from SAP's leadership are the best SMB go to market plans I've seen from SAP in a very long time and which carefully address today's business problems. But we've been here before and things could go badly wrong. As always, the proof is in the quality of the food that customers get to eat. As an initial test and throughout my discussions on the SMB side, I kept asking the same question: does this initiative have board support? I was repeatedly told 'yes' and was given board named sponsors which include CEO Bill McDermott and CFO/COO Luka Mucic. This matters in a company of SAP's size where any revenue line item below $100 million struggles for attention.
My sense is that Steve Singh (CEO Concur and now head of SMB at the SAP executive board level) has broad discretion to build these businesses as he sees fit. That is good and suggests SAP is eyeing these opportunities as a billion dollar and up portfolio market it has yet to tap. More to the point, Singh is heavily engaged in ways that were absent from the leadership of past acquired solutions.
Singh is no lightweight and SAP has wisely tapped into his ability to sell cloud based, digital solutions at scale and create new markets. These are skills that SAP has lacked, along with a fundamental lack of understanding about small value, high volume deals.
In some ways, what I am envisaging is an unfolding of a strategy I suggested some years back when SAP was nurturing the startups to build on HANA. SAP leadership could not get its head around those concepts at that time but today understands that SMB is the only territory where it has opportunities to grab significant organic growth at scale in otherwise fragmented and under served markets. Oracle is already on that train with its own back office cloud ERP solutions but is approaching the market in a different way.
Did I tell you? Yeah - I'm looking forward to this one.
PS - if all goes well, Jon Reed and I have a video surprise in store. It will be a lot of fun.