News Analysis

Mobility and sustainability dominate SAP vision

SAP's new leaders have detailed various aspects of their product strategy at the software maker's annual customer and partner conference, making commitments to real-time analytics, mobility and sustainability, but did they go far enough?

Just 100 days into their joint leadership of SAP, co-chief executives Jim Hagemann Snabe and Bill McDermott sought to reassure partners and customers with a bold technology vision to deliver enterprise content and applications at lightning speed wherever necessary, on-premise, on-device and on-demand.

SAP's in-memory technology, in combination with the mobility expertise from the planned acquisition of Sybase and the July release of a "perfected" on-demand infrastructure, will all help to meet top customer demands, they said.

Commitment to partners and customers

McDermott's presentation of SAP's vision and Snabe's mapping of product strategy to that vision, sprinkled with liberal references to SAP's commitment to both its partners and customers, was aimed at resetting SAP's position after a difficult period which has seen the departure of Leo Apotheker as chief executive, an extensive management restructure, and an about-turn on SAP's controversial plans to introduce a single enterprise support plan.

Feedback from the conference indicates that the bold, united front presented by Snabe and McDermott, as well as chief technology officer Vishal Sikka and chairman of the supervisory board, Hasso Plattner, has been well received.

It is good that they set out where SAP wants to play at a technology level, because many customers have felt this has been missing for some time, said Alexander Drobik, managing vice president at research firm Gartner. "There is now a better customer focus than there has been in previous years."

SAP has finally come out with a longer-term vision that it can actually explain, says Thomas Otter, research director at Gartner.

"SAP has some mojo back. There was an energy and positive outlook at the event that I have not seen for years," he said. "Snabe and McDermott demonstrated that the co-CEO model is working well so far, and Sikka also delivered a strong presentation."

Enthusiasm and vigour

The most important element of the plan is projecting a renewed sense of enthusiasm and vigour in the SAP leaderhip, says Vuk Trifkovic, senior analyst at Ovum.

"SAP was oft-maligned in 2009 and the very confident Sapphire 2010 conference will go a long way in reassuring SAP customers," he said.

But while McDermott, Snabe, Sikka and Plattner struck a positive chord by showing that they have the right issues in mind, analysts believe they could have gone further.

Responsive analytics, optimised applications delivery models and sustainability are important, but organisations also need lower total cost of ownership, faster rollouts, and better integration with legacy sytems, said Trifkovic.

"I am not sure the new SAP leadership addressed these questions comprehensively, although some of the initiatives should help," he said.

Drobik said that while they have set out where they are going, there was very little clarity about how fast the will do it, what the price points will be, how particular innovations will be consumed or translated into products, or how and when customers will be able to transition to the new technologies and deliver models.

"The SAP leaders also provided no indication of what changes customers can expect in the short term, enabling them to plan for this year and next year," he says.

What customers want

Customers will want to know what they will be able to get their hands on in the short term, and the question remains as to how well SAP will be able to execute on the vision.

"Customers will want to know if SAP will be able to give them the business processes and delivery options they need at prices they can afford today, tomorrow and next year," said Drobik.

While the themes discussed by SAP's leaders accurately described the company's SAP's direction, the crafting of this strategy seems reactive rather than being a concerted proactive strategy, said Ray Wang, partner at consultancy Altimeter Group.

"The good news is that each of the trends highlighted represents the hot issues of the day and have finally been articulated together, setting the future direction for SAP," he says.

In real terms, SAP's customers are likely to see more choice in terms of application delivery models, albeit only in certain areas, said Trifkovic.

"They are also bound to see more analytics, ideally offered in parallel to the existing transactional applications," he said.

At least SAP has some bold goals and a vision that employees, customers and partners can asses, which is good, said Otter, "But there is still a lot of work to do to deliver this strategy."

Trifkovic believes this will include internal challenges to bringing to market a strategy with more deployment options. "While customer choice of on-premise, on-demand or on-device sounds great, this has potential to create serious channel conflicts," he said.

The new leadership will have an extended honeymoon period, until at least the third quarter of 2010, predicted Trifkovic.

"I am concerned that all the talk about innovation may actually distract SAP from focussing on some of the problems in the core platform that could lead to renewed dissatisfaction, such as the need for a more robust middleware strategy," he says.


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