Sapphire Now 2018 - a multi-faceted preview

Den Howlett Profile picture for user gonzodaddy June 3, 2018
Sapphire Now 2018 will only go one of two ways: success or disaster. Despite the significant potential to be a winner, I don't see much middle ground. Here's what you should look out for.

As in past years, I'm previewing Sapphire Now. Here's how we do this. The team cast around to hear customers' expectations, and confer with colleagues on what we believe SAP should say.

We also participated in a set of embargoed high-level briefings, but these are equally conversations with senior SAP executives where we provide feedback on topics of interest.

Don't expect too much detail but signposts for discussion as the event unfolds but with one thing we can talk about openly. We are also clear about the things SAP should avoid.

Setting the scene

This year, SAP will either smash it out of the park or Sapphire Now 2018 will be a dud.

SAP has a menu of discrete but inter-related topics that describe a journey and roadmap for ALL its customers. Get that across well and it's job done. But there's no middling result for a company where the 2017-18 news has been dominated by the single topic of indirect access.

Like Vinnie Mirchandani, I'd like to see SAP 'dream big,' but I hesitate to use the metaphor Mirchandani chose of pioneering Americans pushing out to the Pacific from the Mississippi. My American history lessons teach that the Pacific push was accompanied by a fair degree of bloodshed and the occasional massacre. I'm sure customers would prefer to avoid that aspect.

The indirect access elephant

Last year Jon Reed and I wrote extensively about indirect access, penning Sapphire Now 2017 - indirect access a topic that refuses to die as our assessment of the issue and progress made. It took almost a year for that story to play out and while nuanced considerably to the point where SAP provided a way forward, which I mostly believe is positive, indirect access is not done and done.

As I said the other week, indirect access remains a problematic conversation among many customers and a pain point that overshadows talk of new investments in SAP technology.

While we confidently expect SAP to make announcements that should help customers solve many current and pressing problems, provide solid roadmaps and timelines for products, along with demonstrating some pretty cool looking demos AND bring customers on stage, SAP will be faced with many of the same discussion points as last year.

The risk is that the business buyer tunes out, even as IT buyers, the ecosystem of partners and employees hear things that make them smile. It is the business buyer that SAP wants to address. McDermott wants to not only have a seat in the buyer's C-Suite, but he also wants to get alongside the decision making C-Suite executives in a way that's beyond SAP's usual play of focusing on the CEO and IT leadership.

Indirect access is not an issue that's exclusive to SAP, but they're the company with the media target on its back. The paradox is that cloud-based solutions, which you can confidently expect to feature heavily in all Sapphire Now keynotes and major topic sessions, don't have that same issue.

It is almost impossible to imagine, but if SAP could find a way to sweep indirect access aside, then the way is clear for actionable talking points. In order to do that, it must recognize that the transaction is no longer at the center of value delivery. Instead, the transaction is a commodity utility around which SAP has some deep process expertise.

The Digital OneOffice

SAP likes to put out expansive positions and since late 2016, McDermott has talked about 'purposeful' technology. The idea here is that SAP is positioned as a partner that cares about outcomes with the endgame of 'making the world a better place.' 

If you're going to talk in those terms, then there has to be a way of bringing it all together. McDermott was recently noted as saying:

The greatest challenge of our time is getting technology innovation into everyone’s hands regardless of their economic condition.

In that context, you can expect SAP to talk about customer-centricity from a technology standpoint and the idea that the distinctions between the back and front office are no longer relevant to a 21st-century business.

If that sounds familiar, then check out what we've been saying recently about Horses for Sources banging the Digital OneOffice drum. Equally, check what we say about some of the problems. SAP will have its spin, expressed in terms of its products, but the message is mostly the same.

The moment you go down the Digital OneOffice road is the moment you have to talk about integration. SAP landscapes are complicated, and no-one needs reminding that SAP has its share of acquisitions to add to the equation. We know that SAP wants to replatform everything it has onto HANA, but that alone will not solve the integration requirements of automated end-to-end processing. Robotic process automation is part of that story but not the whole enchilada. I'll talk specifically to the ML/DL topic further on.

Expect that SAP will discuss integration in some detail but please SAP, don't try and make anyone believe that this is simple. It isn't, everyone knows it and remembers NetWeaver.

Customers at the center

McDermott telegraphed at the last earnings call that he believes SAP is positioned to provide a differentiated 21st century CRM solution. At the time, Stuart quoted McDermott as saying:

…the relentless focuses we are putting on CRM…re-identifying that category and calling it our own…we know the world needs a next generation CRM concept around integration to the core from an end-to-end perspective...

...Our front office cloud portfolio also grew in triple digits. This is a sign of things to come for SAP’s crystal clear plan to retake the lead position in CRM driven by overall fast adoption of SAP S/4HANA cloud and software grew at a stellar 9%…There was a time when a market leader was dominating in CRM. It was said that they couldn’t be disrupted. Well, let’s be clear once again, we want CRM...

...Consider this from the customer perspective, every CEO agenda in the world has a similar set of priorities. One, how does the business get a single view of its consumer? Every business is looking for new competitive advantage and its consumer driven growth revolution. Even with so much interest, the technology industry to-date has not delivered the capabilities to reinvent the front office. In fact, the many businesses today so called Cloud CRM is nothing more than overpriced software running on first generation SaaS architecture. This is probably why so many have responded so eagerly to SAP’s recent statement about a new vision for CRM. They know, change is coming, we are coming.

Bold? Sure. Realistic? Stuart's call was spot on:

The parking of its tanks on the CRM front lawn of Salesforce (and Oracle) promises fun and games ahead, particularly if McDermott follows through on his intent to redefine and ‘own’ the category.

Tom Siebel owned it once and it was taken away from him by Benioff and Salesforce, just as John Cullinane once owned the database world before Larry Ellison and Oracle took it from him. McDermott is correct that disruptors can be disrupted, but Benioff’s a far smarter tech and marketing guy than Siebel ever was. Game on!

McDermott has a shot at using his keynote to lay out a set of examples that are so blindingly obvious in their value that any implied jibes at Salesforce are unnecessary. If however, he chooses to expand or focus on his Salesforce barbs, I am  100% sure that will go down like a lead balloon. Why? Telling your customers who are also Salesforce customers that they've bought legacy software is ironic, patronizing and disrespectful. They already know they're paying top dollar to SAP. Oh and yes - notice how this plays back to integration?

Developers, developers, developers?

Over the last year, SAP has worked hard on its relationships with AWS, Microsoft, and Google. I'm aware that a bunch of my old SAP Mentor pals will be on site, many of whom are AWS/Google fans. A number of them are running sessions (scroll down this post it's long) under the leadership of Craig Cmehil, the person who first introduced me to SAP style hackathons over 10 years ago.

In the recent past, a clear commitment to open source has been missing. Until recently, SAP employees could not contribute to GitHub, but last month, Björn Goerke mentioned that barrier had been cleared. For the technical people, the GitHub conversations will be interesting as Microsoft is rumored to be acquiring that platform.

More recently, Goerke has been drip feeding a series of open source related Tweets that initially drew cynical responses but which have substance behind them. This regarding SAP's use of Kubernetes:

Developers love open source, so this is good if inevitable news given that Kubernetes won. Elsewhere, Goerke has made clear that developers have a central role to play in delivering on the company's vision:

My concern is that SAP fails to get the business aligned with developers via its community. Watch out for snarky Tweets to assess whether real progress has been made. Although he's a die-hard geek, Cmehil 'gets' the business end of the issue.

In the meantime, and as an example of how this can work out - check Chris Kernaghan's Tweet and the topic link:

Here's a bonus video demonstrating the system. Cool or what?

Last year, co-founder Hasso Plattner's keynote focused on intelligent applications. This year, the message is skewed towards the 'intelligent enterprise.' There are no prizes for reckoning on a layer of machine learning and deep learning. I hope that SAP talks specific and demonstrable use cases that resonate with the audience rather than falling into the hype machine pit (sic.)

SAP faces an important challenge. On the one hand, SAP has access to extraordinarily talented resources both through commercial and academic partnerships. On the other hand, SAP is playing in a fiercely competitive field where there are numerous super smart startups (too many to keep up with) and where the application of ML/DL is already widespread but fragmented among its own customers. In an already complex landscape, will SAP manage to demonstrate the kind of breakthrough success within the context of end-to-end processes?

Dreaming big?

SAP has lost its way in verticals with precious little talk about how SAP will help industries in the 21st-century. SAP wowed analysts and customers in the past through deep and applied industry-specific process knowledge. Sapphire Now 2018 is a major opportunity to win back that argument.

SAP says that it has the most in-depth industry knowledge of any vendor in the marketplace. That may be true for back office processes but is hardly true for the Digital OneOffice or for the 60-70% of the IT landscape it doesn't cover but over which it has aspirations.

There are far too many newer companies coming up that demonstrate fresh ways to approach industry problems. The whole fintech arena is one example. Uptake in manufacturing is another that Brian likes to reference alongside C3IoT.

To its credit, SAP has made strong headway with healthcare and sports but beyond that? I hear SAP is big in hospitality and entertainment. It talks a big game on IoT, but when you scratch the surface, there isn't a lot there to see other than cases that have been on the books for a while.

I'm told the diginomica showground team will be treated to a mind-blowing innovation projects tour. Here's a sneak preview from the Best Run theater. But just how many of those projects will be both viable and presenting deep industry knowledge? We shall all have to wait to see the field reports.


Diversity is top of mind among leading tech vendors and customers alike. And while diversity conversations often start with women, there are many other versions of the same problem around workplace inequality. Diversity is the one topic we can openly discuss prior to Sapphire Now.

Madeline Bennett is our chief diversity analyst and she is tasked to find good stories with that topic in mind - among other things. It should not be a problem.

SAP has a long and frequently overlooked diversity story that addresses issues across many elements of the 'minority' and 'disadvantaged' spectrum. Those stories play well to McDermott's theme about technology inclusion and his over-arching 'better place' theme.

There will be the inevitable SAP and Salesforce comparison among the cognoscenti and Twitterati. Although Salesforce CEO Marc Benioff has always demonstrated equality leadership, Salesforce made equality a core issue in 2016. Salesforce reinforced its message with the appointment of Tony Prophet as its Chief Equality Officer. It is a position into which Prophet has injected enthusiasm and gravitas. SAP does not need to make those comparisons. It simply has to show and tell what it and its customers are doing. There's plenty to feed upon.


We've not heard a great deal about so-called digital transformation and I hope we don't this time around although I see SAP claims expertise in this area. Instead, I hope that SAP will think about the frictionless enterprise. In that context, consider signing up for Phil's d·book on XaaS which goes into this topic in depth, with examples.

SAP is at its best when it tackles big hairy problems in terms that resonate with both business and IT leaders. Saving the world is a problem that can keep for another time. SAP is at its worst when it tries to turn Sapphire Now into a reality TV show. I see plenty of reasons for buyers to give SAP attention to the messages that have been outlined to us, many of which will not be a surprise but which form a coherent whole.

We will know the provisional verdict tomorrow evening.

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