With SAP dedicating much of its presence at the CeBit trade fair to its on demand offerings, has the German giant now undertaken a full-scale conversion to the Cloud cause?
After years of being accused by the pureplays of having little or no interest in the Cloud and then of having a botched strategy, SAP is certainly making more confident noises about its own strategy.
When Rainer Zinow, senior vice president of the Business ByDesign Cloud offering at SAP, was in London last week, I had the chance to sit down with him for an update on the firm's thinking. The last time we'd had such a chat was a little over a year previously and it was clear that there had been some steps forward in the way SAP positions its strategy:
“ If we've learnt anything over the past five years, it's that you can't take an existing application and put it in the Cloud. If you do, it doesn't behave like true Cloud. You have to build it from the ground up. ”
So how does SAP define Cloud Computing? Again, rivals have made considerable mileage from alleging a fundamental (and wilful) misconception on SAP's part.
“From a customer perspective, Cloud means you can keep things really simple, with the promise that you can access any piece of data on any device at any time. For SAP, we need to benchmark ourselves against whether we can live up to that promise – that's the value proposition. ”
“This is a new way to sell and buy these solutions. This is a revolution the same as we around the year 2000 with Amazon and eBay. Before then, size mattered. If you had a lot of storefront then you were well positioned, but after eBusiness came along that didn't matter. In the past, a good business suite was what was affordable to the upper mid market, but with on demand in the Cloud, even a small company can afford enterprise-class applications that they couldn't consider before. ”
Creating an ecosystem of applications for such customers is a key plank of the SAP strategy. This week at CeBit, the firm began to talk about the SAP Store – inevitably dubbed an iTunes for business, but in fact more akin to Salesforce.com's AppExchange. It's an online marketplace for third parties to develop applications on top of Business ByDesign and offer them to customers with SAP taking a percentage for its trouble.
“We know that a partner will build something for one customer and then for another and then for another and there's not scalability in that model. You have a lot of innovations that happen multiple times in parallel and you don't get any traction. With the SAP Store we will give partners a platform and in that respect there is similarity to what iTunes does. ”
This will also enable SAP to expand its reach into markets and sectors where it has little presence or direct interest:
“ The majority of new apps will have a vertical market focus. We are bringing a full-blown business suite to market so there can be some new horizontal apps, but mostly expansion will be vertical. I am working with someone in Germany who is building a real estate app on Business ByDesign. We will work with him in the German, Swiss and Austrian markets, but we have less idea about the UK real estate market. But we know that there are several UK partner firms who do the same thing and we will integrate with them. ”
Apps that go into the SAP Store will be heavily certified by SAP, says Zinow:
“ We need to do certification, absolutely. We have had a long debate with partners about what we can and cannot certify. We can certify that the code works and doesn't open a security back door, but we can't certify that the app does what it say it will commercially. Any major new release of any app will require new certification. ”
As to which areas of business functionality are delivered on demand and in which order, Zinow has his own putative timetable:
“Everyone needs CRM. Everyone starts CRM on the pre-sales side. We will most likely see a couple of moves next. The next wave that runs in parallel to CRM is the financials. Then companies most likely venture into the post-sales activities. Most mid market firms can do a good job selling, then their support is poor for post-sales and customer service. HCM is something which we see in demand, but not in the mid-market for topics such as talent management, but for basic things like recruiting and personnel administration. Payroll is not really an on demand topic – that was serviced 5-10 years ago.”
One market that has potential for new Cloud applications is the public sector:
“I had a meeting with the UK government CIO. Now he has thousands of applications to support, from tax collection to waste management. His point is that Cloud makes his life easier. Most of his apps are custom-built for government and with the Cloud he can develop them in such a way that the underlying infrastructure won't matter. It will take years for this to work out, but it will work. In Germany we have a federal government structure. I met the head of one federal state and they have rolled out SAP to all of their big cities, but the mid-sized cities are not big enough for that. On demand is a possible way forward for them. SAP has a former mayor of Palo Alto working for us. He gave me a long list of things that we can do at local level today. So, forget about the federal governments, do something for the cities. ”
tags for SAP and the Cloud - floating in the right direction?
