John Wookey, previously senior VP of applications at Oracle and head of its ambitious Fusion project, left Oracle in October 2007, reportedly after falling out with Ellison. But he's now popped up as executive VP of large enterprise on-demand at Oracle's arch-enemy, SAP.
"John spent 12 years at Oracle as senior vice president of applications development and is one of the most respected and renowned software applications experts in the world," SAP said in a statement. "We are very excited he has chosen SAP as the next stage of his career."
SAP has already announced a mid-market SaaS pitch in the form of the undelivered to date Business ByDesign. But CEO Henning Kagermann said earlier this year that there would a "services by design" offering for large companies, which would consist of online software components that integrate with a company's on-site SAP software. That makes it closer to Microsoft's 'software plus services' strategy than a pureplay SaaS approach a la Salesforce.com.
It's a great propaganda coup for SAP, reckons Madan Sheina of research house Ovum. “Wookey will face some immediate challenges. For one thing, he'll need to rationalise SAP's current on-demand lineup, which includes CRM On Demand for large enterprises; the new (and problematic) mid-market ERP suite, Business ByDesign; as well as a number of on-demand offerings gained in SAP's acquisition of Business Objects,” said Sheina.
A sore point
“Business By Design is a particular sore spot, having run into performance problems soon after its launch in September 2007 that caused SAP to drastically scale back the rollout while it works to fix them. Business ByDesign is aimed at companies with 100-500 employees, much smaller than the large enterprises that will be Wookey's main focus. But assuming that it eventually proves popular, what's to say its appeal will be confined to the smaller end of the mid-market?
"SAP probably wouldn't turn down a deal to install it in a 500-person division of a large enterprise; success at that level could well prompt calls for larger, corporate-wide deployments that could cannibalise SAP's high-end business suite. That raises the question of profit margins - an issue for every vendor of traditional applications considering expanding into SaaS. The example set by Salesforce.com isn't encouraging; its net profits are slim indeed compared to what Oracle, SAP and Microsoft are used to.”
“Presumably, Wookey will be developing the 'services by design' idea outlined by SAP co-CEO Henning Kagermann earlier this year, which consists of SOA-compliant online components (not complete applications) that integrate with a company's on-premise SAP software. With this model, not unlike the one that Microsoft calls Software + Services, SAP aims to protect its high-margin licensed software business (by squeezing more services revenue from them).
"However, it's unclear at this stage whether SAP or a business partner would host the systems. Given all the buzz about Cloud computing, Wookey may feel tempted to follow suit. But pushing all of SAP into the cloud in one fell swoop isn't an option right now - the software is too big and complex for that. Instead, SAP is likely to target specific processes and services for the Cloud, such as supplier management, talent management and analytics.”
The uncertainty about Wookey's exact role was also picked up by China Martens of The 451 Group. "We're curious what his ultimate role at SAP might be," she said. "One thought is that SAP might try to leverage his experience in helping to kick start the global business unit strategy at Oracle, which helped in retaining key executives at acquired companies. There are plenty of areas in SAP's business, where it might want to buy in extra expertise, such as industry-specific software, and should these be larger entities, the GBU strategy might work very well. Can SAP improve its bottom line through smart purchases, the way Oracle has?
"Perhaps in trying to appeal to high-end customers interested in SaaS, SAP should try to emulate Oracle's Social CRM apps and its Gadgets both for SAP CRM and ERP. We're not sure how much Wookey's work in trying to bring together the Fusion Apps might play here, but undoubtedly he'd have some useful input on improving user interfaces and componentizing elements of apps. Ultimately, though, in trying to make sense of SaaS, why didn't SAP hire someone who's been part of that industry, some heavy hitter from the likes of Salesforce.com or NetSuite?"
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