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CEO of Deal Architect, a top advisory boutique recognized in The Black Book of Outsourcing, author of a widely praised book on technology enabled innovation, The New Polymath, prolific blogger, writing about technology-enabled innovation at New Florence, New Renaissance and about waste in technology at Deal Architect.  Previously Analyst  at Gartner, Partner with PwC Consulting. Keynoted at many business and technology conferences and has been quoted in the Wall Street Journal, BusinessWeek, The Financial Times, CIO Magazine, and other executive and technology publications.

17 responses to “What happened to the SAP I knew?”

  1. blast off

    There has definitely been limits to the extent of functionality that can be supported by a relational data model. Perhaps the new kinds of toolsets and data structures (HANA) can provide a new kind of canvas with which and on which to create and rollout the rest of the uncovered %70 of customer functionality needs. The hope is that the thought leaders at SAP get back to the role of product creation, rather than persuasion. The original SAP was all about letting a real time software product stand on its own, and let the buzz of it’s wonderfully expansive functionality create it’s own buzz. I suppose, we all in the customer community can dream, wish, hope, although if SAP needs any ideas, we’re here, and waiting, ready to offer myriad an app idea.

  2. What happened to the SAP I knew? - Enterprise Irregulars ← SAPfreelances.com

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  3. vinnie mirchandani

    Shaun, thanks. Not just in SCM or PLM – if you look at many non-manufacturing verticals where SAP (or its partners) promised wall to wall coverage, there are significant gaps.

  4. Luke Marson

    SAP does touch many many areas and maybe too many. But your second point is hardly anything to do with SAP – they can hardly control the SI ecosystem. In the HCM space we are seeing a whole new generation of rogue SIs that are not bringing customer value (but at least are moving away from meeting requirements with hundreds of man-days of ABAP coding), but I don’t see how much SAP can control this. Would like to hear your thoughts on what they can do better to horde in the pretenders.

    I hear a lot of SAP customer success stories, but I guess there are also many that I don’t get to hear that SAP don’t want me to hear. And I fully expect it is the same with Oracle (although no doubt you will disagree) and Workday. One thing I would note from HCM space is that of the 200+ licenses sold for Employee Central (not all have been implemented yet) they only have 2 or so reference customers. We are about to provide a 3rd, but it’s still not a high ratio and I wonder why this is so.

    Interesting blog – even if I know you have more of a soft spot for their competitors 😉

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  6. Bob Egan (@bobegan)

    Vinnie – Similar story in much of the SAP mobile offerings.. The analogy that I often use is that SAP makes – or has acquired – some really colorful Lego blocks. Unfortunately all too often, I see that SAP orphans the customer to figure out how to assemble all the Lego’s into something useful. Enter SAP Custom and SI’s.

    This is especially problematic in an “emerging” channel like mobile. This sector is actually overweight w/ very agile product companies. (many of them crap)

    Like SAP and their competitors were in the 90’s, these mobile product companies cannot, will not survive w/o being very attuned to customer wants and needs. They cannot market their way out while masquerading as an integrator. They don’t have the $$ or channels.

    In some ways, I think SAP DNA that you are pointing, has much to do with solution selling going off the tracks…

    I may get hammered here for saying this, but I think Microsoft is the anti-log of SAP – their marketing and solution sales suck, but they keep upping the bounty on the product side – even if they have to run through some pretty overt fails – fast.

  7. V Sikka

    Vinnie, it is our endeavor to return to our roots, even though we are a *much* bigger company now, with a much larger footprint. I have endeavored to transform the company in this manner with HANA, and HANA based applications. I hope that you’ll find this TechEd to be aproductive event from this perspective. As always thanks for your candor, and we look fwd to resuming the same greatness that you remember fondly, at a much larger scale than back then.
    Best,
    Vishal

  8. Welju G.

    Netweaver just “a cynical and utterly hollow marketing construct”?

    In 2003 and 2004, SAP was promoting NetWeaver as offering process and data integration with SAP applications (including partner integration, although not as a general-purpose infrastructure replacement). Previously, customers had to use IBM’s “WebSphere”, Microsoft’s “.NET”, or BEA for composite SAP applications. NetWeaver replaced third-party tools to manage the interaction with SAP data. In addition, it provided greater stability, reduced costs, and business partners were able to use NetWeaver to create tailored processes. It allowed users better access to application support that spans organizational business processes, inside and external to a company.
    SAP’s goal was to have 1,000 NetWeaver reference customers by 2004. At the end of that year, there were more than 1,500. Admittedly, not good for third parties.

  9. Vinnie Mirchandani

    Vishal very nice of you to comment. Thank you. I will not be at TechEd. Have a successful event!

  10. naomileebloom

    On the same subject, here’s what I wrote in May, 2013:

    SAP, SAP, Wherefore Art Thou SAP? http://infullbloom.us/?p=4490

    [Full disclosure: SAP has not been a client in many years, and then my work with them was quite limited.]

    I’ve always had a warm spot in my heart for SAP. When I published my first (and thus far only) 700+ page book in 1994 (“Human Resource Management and Information Technology: Achieving A Strategy Partnership”), Klaus Tschira, one of SAP’s founders, became a big fan of my work, and me of his.

    Early on, Klaus understood and believed in the power of object models and object-oriented development as well as in the importance of strategic HRM (so going a lot further than merely administrative improvements in HRM), and he translated those views into SAP’s HCM products over the many years that he led HCM product strategy and development. Our friendship started because we were simpatico when it came to enterprise software.

    But it was while I was in Phoenix in 1995 to speak at SAPPHIRE that I saw Klaus’ great humanity. My father collapsed while I was at SAPPHIRE, and I raced home to be with him. Klaus gave my presentation for me, making sure that I didn’t feel I was dropping the ball on him and SAP, for which I always will be grateful. My Dad never regained consciousness, but I was with him and able to support my sister and Mom through the difficult end-of-life decisions facing us — and to do so without any professional guilt. So, even when I’m being critical of some aspect of SAP’s products, leadership, business practices, etc., I’m rooting for their survival and success.

    Therefore, amidst all the discussion yesterday about the latest major organizational changes at SAP (and there have been many such over the years I’ve been following SAP), I kept looking for the silver lining. No surprise that Lars decided to leave as many had predicted this. And no surprise that SAP is betting on HANA; what else should they do? Sad that their track record with HR leaders is so poor, but it’s even sadder that there are no highly visible women in SAP’s executive ranks. But what really troubled me was that, not only via SAP’s own communications but also across the twitterverse and blogosphere, there was very little discussion of what SAP really needs to do in order to restore this giant of the last generation of business applications to being a successful competitor for the next generation. And while I tweeted my thoughts on this yesterday, I felt they deserved a blog post of their own.

    I believe that SAP needs a coherent and comprehensive next generation true SaaS applications strategy across all their product domains, and then to have delivered on this yesterday. And since delivery yesterday isn’t possible, then they need to deliver on this at the earliest possible moment. While innovative development platforms and databases are powerful and potentially disruptive, applications since run the world, now with embedded analytics, mobile delivery, built-in collaboration and social everything, and the speed of in-memory to unleash the predictive analytics which are our collective future. So, as SAP’s huge installed base of on-premise customers, but more importantly customers lacking the needed applications foundations for success in the 21st century, make the move to true SaaS (or more specifically to SaaS InFullBloom) in order to reap the significant business benefits of doing so, SAP must be ready to compete again for every single one of these customers.

    Once upon a time, Business ByDesign was supposed to be that next generation, but that doesn’t seem to have panned out, and ByD has been relegated to the lower end of the market after much architectural reworking and without a very strong HRMS/TM capability. And then, after buying the very expensive SuccessFactors, we were told that SAP’s next generation true SaaS offering would be some combination of SuccessFactors for TM, a greatly upgraded and rearchitected Employee Central (and the metadata framework thus introduced is a very good start) for HRMS, a hosted rendition of SAP’s workhorse global payroll (now rebranded “cloud” payroll), some extrapolation of ByD’s financials and many more bits and pieces that lay well beyond my areas of expertise. But in my opinion, that’s not good enough. SAP’s customers, and SAP itself, deserve a lot more.

    I think it’s time for SAP to pick an architecture, development platform, database, object models and everything else that’s needed in the foundation and then to bring to market a whole new applications suite. If HANA is that architecture, development platform, database and more of the needed foundation, that would be terrific. But even if that’s true, even if everything else we need as to effective-dating, inheritance, security, etc. etc. is contained within HANA, even if HANA provides a fully models-driven, metadata-rich, definitional development environment, there’s still a lot of heavy lifting needed to develop next generation object models across all the applications domains served by SAP. And then those next generation applications must be reincarnated or built fresh on top of those object models within HANA.

    That sounds like a ton of work, so I’m hoping that much of this is already done and just needs some pulling together. But wherever SAP is on the road to fulfilling the next generation dreams of their current customers and of the market, there’s not a moment to lose. As for me, I’m hoping yesterday’s organizational changes make this happen ASAP.

  11. Peter Chen

    It was around 94 that I got my first exposure to SAP. SAP has obviously changes as any IT company has to. IBM has morphed from a hardware/software company to a large consulting firm. Cisco has evolved from switches to video and servers. Analytics now reach half of SAP’s revenue according to SAP…this evolution is most obvious since the purchase of BOBJ and Outlooksoft.

    Through all, one thing stand unchanged…”rogue Si” was talked about which SAP have minimal control…..what about the rogue SAP account reps?

    The common reaction was head-shaking…and it remains universal.

    Sine Leo was removed, SAP has done a great job pushing their product owners and developers to the front. But in formal engagements where customer IT executives attend, the account reps and rogue support people still dominates. The marketing, rather than real comprehensive solutions are still being sold. That is a real tragedy—as that is where SAP lost and will lose their credibilities, despite the great product engineerings there is.

    Go no further than the story of SAP BW on Teradata…and talk to the customer actually bought and stuck on that license.

    Between SAP and the O, SAP easily has the clear roadmap and technical advances to back it up. SAP also has the great technical minds in product solutions… Putting the competent people and “forcing” them to connect with real customers—SAP has started those, but much more is needed…..

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  13. CloudEnthusiast

    HANA is no doubt a great piece of innovation by SAP but this should be offered to all customers as a standard technology. In-Memory databases are the future & most experts in the industry will agree to that. I think most cloud vendors will use some form of in-memory database in the near future. Workday already does it. But this should be a standard database technology tucked underneath the platform that all customers should get anyways as a competitive performance boost. At the end of the day, a cloud-based customer will only care if the application addresses their business needs & how fast it performs. But they will not worry if Hana or something else was used to get this done. I think SAP can make a bigger comeback by refocusing on being a dominant application vendor by building out an application platform much like the force.com platform & run it all on HANA to give its platform the performance edge it needs over other vendors. Salesforce, for example, can restructure their platform in the future to work on Exadata making them also competitive in terms of performance. Thus, there is lot of work to be done in addition to performance benefits. By refocusing on application development, SAP can once again maintain its place as a #1 enterprise application company in the world.

  14. Amit Sinha

    Hi – good discussion here. We have a proud history and are renewal in full progress right now. Every company needs to change constantly to better serve customers. Feedback is welcome, including from you Vinnie and sponsors of this site (Workday and Salesforce).

    Few thoughts from my side:

    a) Yes – we want to be an apps and platform company 🙂

    Apps: The apps are getting renewed at an amazing pace – new Fiori experience + rethought processes (e.g. MRP, Finance, Financial Close), all brought non-disruptively to the business. Also, note its not only on-premise but cloud apps as well.

    Platform: We are getting better at it with support for open source, easier integration into Hadoop, Free dev licenses, mass access to training from Hasso himself (openSAP, openHPI) We apply learning from the NW experience into HANA.

    e.g. We we launched startup focus program on HANA, SAP re-discovered its roots as a startup…exactly how the founders in the picture above worked. Today we connect to hundereds of startups, the one day development accelerator with startups is all technology knowledge transfer and now we offer simpler and free dev tools to get them to market faster. No marketing – ask start ups like Feedzai, Next Principles and Semantic Visions on what they can now accomplish. This program is designed to value a startup’s time and market impact.

    Same old spirit..new ways to deliver and work.

    b) Operational excellence – SIs see this change as well, specially on HANA. SAP itself with the use of Rapid Deployment solutions is leading the SI ecosystem to faster and best practice implementations. Think of a BW on HANA migration, what took months is now done in days and weeks – for those who want to see proof try the free trial of BW on HANA on AWS here (http://www.saphana.com/docs/DOC-3954).

    c) Customers are the voice at SAP: This has not changed. I have personally seen how Vishal and the entire products team work collaboratively with customers – making them our voice. Customers like eBay will tell you that HANA is making their extra-ordinary people even more powerful. SAP business applications provide a way to account and tell the state of business as is and now with HANA they can predict with precision where the entitre eBay marketplace will be by category. I can count many other such customers who work with us hand in hand. Our latest area of work in healthcare is another example – we are working hand in hand utilizing design thinking methods to deliver solutions end users will love.

    Just my 3 cents!

  15. vinnie mirchandani

    Amit, thanks

    If SAP is truly apps leader then how come it is just brushing up 10-20 year old categories like ERP and CRM and SCM? where are the mobile deposits for banks, telematics for auto insurance, soft POS for retail and thousands of other recent apps that companies have custom built or bought from niche vendors?

    On the ecosystem, SAP recently told partners there would be over $ 200 bn in services in next 5 years around your analytics. Sounds like more bloat to me

  16. wjw

    SAP is quite wise to explore new technologies (cloud, in-memory, mobile, software-as-service, e-commerce) that diverge from it’s core (ERP), but in the end, as it gains expertise in these technologies–even if the expertise is gained through failures (By-Design)–SAP should feed that tech back into it’s ERP franchise, not only to create speed (HANA) and device access (cloud & mobile) sizzle, but it should endeavor to fully explore new functional and process possibilities in it’s ERP core that go way beyond it’s current ERP core, competitors, and even the speculations of business/IT academics, customers, potential customers, start-ups, competitors and bloggers. Indeed, SAP did this very thing back in the day (1972-1999). It now has newer, more capable underlying tech to proceed with a major rework in its ERP (remaining %75 of functionality needed by customers unmet by SAP–%80 unmet by Redwood Shores but they are catching up) such that it can restore its magic where it need only polish doorbells to make the the sale.

    The possibilities are limitless, if SAP restores it’s engineering and product development focus (even if DAX and Street have to take a hit on earnings for about 3-4 years). For starters, SAP should now look to actually increasing it’s R&D spend (in spite of or even because of the By-Design draw-down), and now look to tuck-in purchases (which can enable functional “wow” factor at a lower acquisition price). SmartOps was a great tuck-in, for instance (Get their stuff, along with all the supply chain (APO) into standard ERP, and in fact, SAP should already have a demand driven MRP model built into standard ERP ala the 3rd edition of Orlicky’s MRP–HANA possibilities can definitely help.). Now, SAP should purchase some tuck-ins like Acorn Systems and Profit Velocity Solutions (Time based ABC software (Acorn) and throughput accounting solutions (Profit Velocity), if embedded in ERP, facilitated by HANA architecture, would finally be breakthrough in enabling the relevance of the still irrelevant management accounting profession.) Oh, and if Microsoft isn’t cooperating enough with office integration, SAP should do their own spreadsheet tech that would enable in-place spreadsheets (spreadsheets embedded in ERP software) whose formats, along with cell formulas, can be save in a way similar to something like that of ALV (ABAP Listview formats). Finally, another tuck-in would be Synactive. There’s no reason that anything should have to be entered via traditional SAP screens. “Synactivize” the entire suite. Finally, don’t just partner with SAS, SAP should buy them.

    Bottom line, there’s plenty to do and improve on in the ERP Suite, especially since SAP now has great foundational toolsets. If SAP wants to wow folks, just some of the ERP enhancements I suggests should do the trick, and you’ll then see Workday, Oracle, Dynamics, Netsuite, Unit4, Exact, Sage, “in-house,” Quickbooks, & other only dimly in the rear view. ERP matters and SAP needs to leverage it’s new found tech to bring back hype that is justified for its ERP core–it’s what run’s business, at least sort of, until SAP’s heart is back into the ERP core. SAP can do this. It must do this.

  17. SAP Business Object Solutions

    Thanks for sharing your thoughts on the changes to SAP over the years. Looks like you’ve got a long history with the software system.