I'm going to score Bill McDermott a solid 8/10 for his SAPPHIRENow opening keynote. Strong messaging tied to sensible customer examples and framed within a tight 50-55 minute schedule helped McDermott deliver a better opener than this time last year. What did we like?
The consensus among the cognoscenti was that the critical matter of avoiding buzzword bingo while at the same time appearing confident without being boastful was well executed given that so many things could have gone horribly wrong. At the same time, plenty of customer name checking provided that essential air of credulity that only customers can provide.
Elephant in the room
SAP faced a difficult crowd. From the first moment I arrived in Orlando, the two most common words on everyone's lips? 'Indirect access.' It is clear this issue was on many people's mind to the point where I heard that certain of SAP's largest customers chose to stay away rather than appear to support what they believe is a never ending money pit. Ugly!
To his credit, McDermott chose to head this off quickly, prefacing his comments with:
...the balance between IP and cost is delicate.
McDermott went on to reference the Order To Cash and Procure To Pay processes as representative of simplification of what had become un-necessarily granular price book items. He also made the statement that 'static' data coming out of SAP systems will 'forever' be free to use. So far, so good but that still leaves open numerous questions as they relate to sensor interactions and the vagueness of older contracts that is causing so much angst. For example, in the run up to SAPPHIRENow, one ISV claimed that surveys among its internal customer base suggest that as many as 80% of its group face uncertainty or are unclear on whether they have an indirect access issue.
Discussions with SAP executives and user group representatives continue so I'll hold this until later in the week. However, the indications I consistently get is that SAP has a range of difficulties connected to this topic. Onwards.
Positioning and Leonardo
On positioning, I liked that SAP reminded attendees the company has a storied history in bringing radical change to the world through its R/3 systems and that what is coming down the pipe in the shape of Leonardo is another example of how SAP leads the world in radical change. In one sense this is not new. GE has a similar pitch with Predix but that is limited to its own physical devices and equipment. IBM is pitching Genius of Things while Microsoft is trying to entice developers by going back to its roots as a 'free' developer resource only this time backed up with Azure as the easy to use infrastructure.
Bringing on Michael Dell, CEO Dell, a company that is going through its own pivot away from pure hardware to software, and reminding the audience of the two companies 20 plus year relationship while talking about problem solving for today's economy was a good way for customers to contextualize for themselves what SAP's Next Big Thing really means. Glimpsing to the future with industrial examples of work SAP has already done helped to position the company as a genuine player in the complex IoT space. Finally, McDermott's proclamation that
SAP is the genome sequencer of the enterprise
was an extraordinarily bold statement.
All good so far.
Bernd Leukert, who runs the technical part of SAP's products bounced on stage with an enthusiasm I don't normally associate with this otherwise careful person. He has to communicate some of the high level technical 'stuff' around Leonardo which, it is now clear, embraces far more than the IoT topic alone. SAP is rolling analytics, machine learning, cloud platform, user interfaces and IoT into a smorgasbord of tools and technology that will lead to applications capable of being rolled out to selective industries. The most obvious industries right now are retail and CPG but you can get a flavor of where this goes from the diagram above.
Will they buy it?
Despite McDermott and Leukert's obvious enthusiasm, amplified by well rehearsed demos, it was not clear to me that this audience is well aligned to SAP's message. There are no ready answers as to why that might be. My sense is that many customers are in the middle of digesting their 'road to S/4 HANA' implementations and that more 'stuff' from SAP is not necessarily top of mind. That's hard to square against the enthusiasm we saw in later sessions from the likes of ATB Financial, Lufthansa and Thomas Jefferson University, Health; all of which are conducting experiments in the application of digital technologies as both a way of modernizing and improving business processes.
Prior to SAPPHIRE, I met with senior SAP executives who focus on the 'new-new' and was surprised to learn just how far SAP has gone in helping customers in retail, asset management, predictive plant maintenance and logistics areas. The company is working with government agencies in Germany, France and Italy to see where standards (which don't currently exist) may be applied in this brave new world. I admire their efforts although experience suggests that governments are not the best place to get that work done. However, there is a logic to SAP's efforts when you consider there are no dominant players yet an almost overwhelming amount of technology available at low or no cost.
Side note - SAP has been a long term, strong supporter of diversity in the workplace. It backs its talk with a variety of programs that include action to proactively bring those on the Autistic Spectrum into the workplace and giving voice to the LBGT community in its workforce. It was good to hear McDermott discuss that topic and for SAP to put on panels addressing diversity in all its forms without the usual schmalz or navel gazing.
Analyst Holger Mueller was surprised that McDermott used his keynote to introduce what he terms Leonardo 2, some of which I have discussed above. I wasn't. If nothing else, the opening keynote demonstrated that in the fast pace 21st century, SAP is not only listening to its customers and responding accordingly (think S/4 roadmaps), it is coming out of the relative shadows in putting a Honking Big Stake in the ground.
There is much to be done and what I now want to see is SAP coming forward with what it does best - solving and showcasing Big Hairy Problems. I want to see SAP live up to the folklore expression attributed to co-founder Hasso Plattner who is said to have once quipped:
We solve difficult problems. If we wanted to do simple we would have invented Coca Cola.
There is more to come as Jon Reed and myself meet with SAP board members. In the meantime, I encourage readers to dip into our growing SAPPHIRENow 2017 video playlist.