Norbert Steinhauser/SAP SE

SAP Sapphire 2024: AI in all its forms – but not only AI

SAP talked a lot about artificial intelligence at its big annual event in Orlando. But the supplier has more discreetly addressed other issues closer to the concerns of clients

SAP talked a lot about artificial intelligence (AI) and generative AI at its annual Sapphire customer event in Orlando last week. But according to experts, the software giant was more discreet in addressing issues that remain central to the concerns of its longstanding users.

At Sapphire, SAP was “firing on all cylinders”. Like many vendors of business applications, the German company made a host of announcements relating to AI.

SAP is infusing more and more of it. Its executives cited, for example, AI-generated reports in SuccessFactors, which provide HR departments with information for remuneration discussions, or forecasts in SAP Sales Cloud that “anticipate” the combinations of salespeople and products most likely to increase sales.

In the announcements, SAP’s Business Technology Platform (BTP) is now integrating large language models (LLMs) from Amazon Web Services (AWS), Meta and Mistral AI into its generative AI hub. This will make it easier to explore use cases with these LLMs in the SAP world.

Joule and Microsoft

But the big announcements of this year’s event concerned SAP’s generative AI copilot Joule and, above all, Microsoft.

For Joule, SAP’s equivalent to ChatGPT is being extended to the company’s entire portfolio of solutions. Joule was launched in SAP SuccessFactors in the autumn. It is now integrated with S/4HANA Cloud solutions and others, such as SAP Build and SAP Integration Suite.

By the end of the year, SAP promises that it will also be available in Ariba and Analytics Cloud.

For Microsoft, both Joule and Microsoft Copilot will benefit from “in-depth bidirectionality”, said SAP. In other words, the two AIs will be able to talk to each other.

“By integrating Copilot for Microsoft 365 into Joule, a user can book a flight using SAP Concur and Joule, and Joule can block their calendar in Microsoft Outlook,” said Philipp Herzig, chief AI officer at SAP.

“Imagine a product manager working on a launch – he meets on Teams with a cross-functional team and they collaborate with Microsoft 365. Joule can connect to the profiles and skills of the members of this team, in SuccessFactors, and to the key business information in S/4HANA Cloud.”

SAP CEO Christian Klein added in his opening keynote speech: “Joule is ready. It will be delivered ready to use to all our cloud customers.”

SAP currently has around 50 Joule use cases in its applications. Klein promised that this number will double by the end of the year.

AI partnerships

SAP also announced partnerships with AWS, France’s Mistral – whose models are coming to BTP – and Meta for generating scripts and customised analytical applications in SAP Analytics Cloud.

“Meta’s next-generation model [Llama 3] excels in language nuance and contextual understanding, making it an ideal candidate for translating business requirements into tangible results,” said SAP.

And finally, SAP added two other equally major AI partnerships, with Google and Nvidia.

With Google Cloud, SAP is extending its partnership to apply AI in the supply chain. Joule and SAP Integrated Business Planning for Supply Chain will integrate with Google Cloud’s Gemini and the Cortex Framework database.

With Nvidia, SAP is further deepening its cross-product partnership, in particular around the Nvidia Omniverse Cloud APIs, which enable the simulation of products and complex manufacturing configurations in the form of industrial digital twins in SAP Intelligent Product Recommendation.

SAP will also use Nvidia’s AI models to mine its own consulting data on cloud deployments - which will help Joule ingest best practice for migrations to Rise. SAP will also rely on Nvidia’s “accelerated” infrastructure for its models that will generate ABAP code.

It’s not just AI at Sapphire

For analysts, these announcements are interesting. But they are perhaps a little ahead of their time in terms of customer concerns.

“AI has quickly become the new battleground and the next big thing in enterprise applications. So it’s no surprise that SAP has made it a focal point of Sapphire, particularly in the keynotes,” said Liz Herbert, vice president, principal analyst at Forrester.

But advanced AI functionality will only be available to Rise customers. And even if SAP’s CEO promised that an “architect” will now be assigned to each company as part of the Rise cloud programme, one of SAP’s major problems remains convincing its longstanding users to migrate.

“There are still a large number of SAP customers who remain on [legacy systems],” said Simon Ellis, analyst at IDC.

Jon Reed, co-founder of Diginomica, added: “There’s still a bit of a feeling that SAP is leaving this subject for later. [However], many customers are thinking about something completely different from AI. They want to know what is going to happen to the major investments they have made in their ERP.

“It’s a legitimate question that needs to be answered – why should they upgrade their systems as a priority? Why should they upgrade their systems in the first place?”

For Herbert, SAP is well aware of this. The Forrester analyst’s opinion qualifies those of her colleagues. The software firm is not abandoning this issue – quite the contrary.

“Many customers are still struggling with the fundamentals of modernising an old ERP system,” she said. “Sapphire offered many practical sessions [on this topic] all around the showrooms – many of them customer-led.

“The emphasis has also been placed on process excellence,” she added. And with good reason: “The old ‘best run’ message will always be a differentiating factor and a strength for SAP.”

SAP’s process and data expertise by industry is “something that competitors can’t match. It remains a compelling reason to choose SAP,” she said.

The German supplier may not be highlighting the legacy ERP issue as much as AI at Sapphire or in its communications, but it is not forgetting to deal with the issue in a more discreet way, Herbert concluded.

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