A brief reflection from the SAP Influencer Summit on SAP’s On-Demand strategy
At the SAP Influencer Summit in Boston Dec 8/9, SAP put a lot of emphasis on its new roadmap into cloud computing and how serious the company is taking the topic for its future success. Well, to be true SAP actually avoided the term ‘cloud’ almost entirely and talked about ‘on-demand’ solutions instead. Maybe the company stayed away from the term ‘cloud’ because there is still a lot of confusion in the market (or inside SAP?) what cloud computing actually is, or to simply differentiate from the masses that currently go ‘crazy in the cloud’. Anyways, to offer pay-by-use software applications via self-service over the web indeed is pure cloud computing and SAP has declared it to be a future focus area for the company when Jim Snabe said “… significant [SAP] investment into on-demand will disrupt the market and SAP will regain leadership in this space”.
Consequently to the strategic importance of the topic there was a dedicated executive session in the afternoon (one of 4 such session) entitled ‘SAP On-Demand Strategy’, with the main speakers John Wookey, a (recent) hire from archrival Oracle and SAP veteran Peter Lorenz. In summary SAP’s On-Demand strategy consists of three layers: 1. Line of Business On-Demand 2. Business Objects On-Demand and 3. Business ByDesign. Similar to the three letter acronyms of the solutions SAP is well known for, the company seems to prefer 3 layer descriptions when it comes to explain their technology roadmaps. That’s at least what I thought in the beginning but it soon became quite clear that there are 3 different layers because they are actually three different strategies.
· Line of Business On-Demand headed by John Wookey, addresses software applications via extensions such as CRM or E-Sourcing. It does not include what Snabe called the ‘Core Business’ with Business Suite 7. SAP’s CTO Vishal Sikka made this very clear when he stated in his key note “… the [SAP] Business Suite in public cloud – I don’t see that happening any time soon”. Apparently SAP has no concrete plans (if any) to take their large enterprise core business applications to an on-demand model. On the business extension layer however, SAP presented a clear on-demand roadmap:
o 4 on-demand applications that are already available: CRM, E-Sourcing, BI and Carbon Footprint;
o 2 on-demand applications in planning: SCM and Travel & Expense Management
o 1 on-demand application provided with a partner: HCM.
Another thing to mention is the technology platform SAP’s on-demand extensions will leverage: Frictionless, an acquisition SAP did in 2006.
· Business by Design, headed by Peter Lorenz on the other hand is SAP’s purpose build SME solution that is exclusively offered on-demand. Two years after the first introduction the solution today has ~100 customers and is finally planned for a more general release mid 2010. Another important news is that ByD with Version 2.5 is finally purely multi tenancy capable – a feature SAP did not provide in the past that Lorenz now called “… one of the most important prerequisites to scale”. The ByD analytics now is purely InMemory based and “… partners will build extensions in a Visual Studio SDK environment”. When Lorenz showed the complete picture of SAP’s SME portfolio to address e.g. the requirements of LE subsidiaries it looked like a complex molecule that reminded me of my chemicals classes at university: The huge Business Suite surrounded by ByD (SAP Business ByDesign), B1 (SAP Business One), A1 (SAP All-In.One) and Integration Hub ‘atoms’, some of which are on-premise only (B1) or on-demand only (ByD) that make you dizzy. Business ByDesign seems to reach a level of maturity in 2010 to finally become the big new thing it was supposed to be from the beginning. SAP’s complete SME solution strategy however, with various relevant solutions on different platform and restrictive deployment options is still far from mature.
· So why didn’t I describe the 2nd on-demand layer, Busisness Objects On-Demand before ByD – after 1 comes 2 before 3, right? Not so for SAP. Interestingly the 2nd layer ‘Business Objects On-Demand’ was not featured in the On-Demand session at all. So I went to the Business Objects Technology Deep Dive session next, but nada it wasn’t featured there either. Later I learned that Marge Breya talked about Business Objects On-Demand in the ‘Technology Portfolio and Direction’ session that was running parallel to the On-Demand session – my fault expecting this in the wrong place. So look out for a brief summary on BO On-Demand at later time (or place).
In summary it became eminent that SAP takes cloud computing very serious (independent of the terminology used) and strongly invests into the topic. The company presented a clear vision and solid roadmap for on-demand business extensions based on the Frictionless platform and enhanced Business ByDesign with important capabilities to become the successful SME On-Demand solution it is supposed to be. However, I couldn’t help but leave with the impression that there is not a single coherent corporate on-demand strategy, but different strategies, based on different technologies for different purpose. The fact that Wookey and Lorenz were sitting far from each other at different ends of the first row was an interesting picture of the situation. The three pillars of SAP’s on-demand strategy, LoB On-Demand, BO On-Demand and ByD On-Demand seem to be driven by different people and ideas – and maybe this actually is a strength. As we all know, at the end it is usually individual great minds with visions that had the most impact in human history.
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