My compliments to SAP yesterday for the logistics and the upbeat mood at SapphireNow have been widely reported. The impressive technology and logistics at the event, in particular, deserve a post on my New Florence innovation blog – SAP is helping put together the specs and videos.
What has been less reported is the exchange I had with Vishal Sikka, the CTO on Monday about how SAP just “spray paints” innovation. Dennis Howlett captured Vishal’s reaction on video here. As I left the conference, I felt even more correct about my assessment, and why SAP over the next couple of years will have to run harder than it ever has.
Let me discuss 4 areas where SAP has to really step up:
a) Partner productivity
It was surreal – it could have been 1998. The size of the partner booths and their parties at SapphireNow continue to be a vivid sign of an out-of-control ecosystem which easily adds $ 75 to 100 billion a year to the SAP customer TCO. So, ex Bearingpoint employees are now carrying Deloitte cards and ex-Deloitte employees are carrying Infosys cards but they are most adept at SAP modules like FI/CO, MM which are 2 decades old. You call that innovation? Similarly, there is little productivity on the hosting/infrastructure side. While SAP can promise them a world of reduced storage as we move to in-memory applications, for the next few years, SAP customers would do much better with cloud storage and processing costs which are often 5 to 20X lower than current on-premise costs. Shared application management that SaaS vendors can deliver can run circles around the so called lower costs offshore SAP partners can deliver. Upgrades take way long and are too chaotic in SAP world compared to 5 minute upgrades Workday and others are showing.
In the meantime, SAP can barely get its act together about partner certification – some thing it should done a decade ago. SAP hates to be told this but whatever innovation it delivers has to be measured against an investment filter. Its partners bloat those investment needs tremendously. Have been doing for years. Aggressively pushing them to become dramatically more efficient would be one of the best “innovations” SAP can deliver.
I am pleased SAP is finally releasing this “prisoner”. But let’s not forget – it has primarily been shepherding 100 customers for the last two years…