Skip to main content

SAP State of the Nation

Earning my keep to an extent with consulting in the SAP orbit it of course is of interest to me how the no. 1 enterprise software vendor is doing in my nape of the world. And I am deliberately not talking about other regions - just mine. And yeah, I also may be wrong, but here's my take.

Starting from a look at my specialty - CRM - it appears that not a lot is going on in the SAP arena. While it is true that many companies still consider CRM as not so crucial to their business a deeper look reveals that there is no real drought. There are implementations, but apparently, in the words of my former boss Bob Stutz, then at Microsoft and now at SFDC: "We do not see SAP, the final decision is between SFDC and us". And MS Dynamics grew considerably in the past years. This indicates that there is a market. So why doesn't SAP get the implementations? Is it because of problems with the imlementation projects? They surely exist, believe me! But then other vendors suffer from them, too.

Ask Bob.

Or my wife ...

So this cannot be the only problem.

Which raises the question whether SAP's problem is more widespread than just CRM.

Some companies opt to implement systems of second and third vendors to overcome deficiencies that they see. This is more often than not for pragmatic rather than strategic reasons. The integration of these systems is either not planned for or considered easier/cheaper than extending the SAP functionality. Quoted reasons reach from not believing into SAPs capabilities to outright "I don't want SAP - and I do not care that it is more expensive" - the latter coming from an executive of a company with an "SAP first" strategy. Yet another company, pre the hybris acquisition by SAP, decided against WCEM as there wasn't any in-country reference implementation. Wrong reason, right decision. Still, implementing it into the SAP infrastructure was a piece of work. Another customer replaced the existing SAP web loyalty implementation with Intershop, going full ecommerce. MDM, data cleansing - a natural first look would be into Business Objects, yet given options customers went for Experian instead. Or they choose Retalix over SAP for a loyalty implementation.

So I asked some colleagues how they see the current SAP consulting market in ANZ. The answers ranged from "a bit slow" to "I believe they had a tough year". A look into job posting on the web seems to confirm this. Not many SAP implementations seem to go on and every position is posted via recruiters galore - which indicates another problem.

What does this tell us, or rather how do I interpret this?

Well, for a starter it seems like SAP is struggling to sell her existing products, yep products, not solutions - and either also doesn't sell the brave new world of cloud products or is implementing them herself. The latter is a real possibility, which deprives SAP of some multipliers.

But then why does the competition claim to hardly see SAP in competitive bids? So no projects going on or sales into the existing customer base only? Both bad. I tend to think that SAP started to neglect her customers by a strong focus on the new generation of products without offering a clear, manageable, and affordable upgrade/migration path. SAP also seemingly does not reach new customers or doesn't convince them of the advantages the new products offer.

The existing business suite is apparently no more future proof.

May this be because of talking too much talking about HANA (technology) and not enough of business solutions to real problems?  Do the new products offer enough functional breadth and depth to be acceptable to the markets while the existing ones are perceived legacy?

Looking into the existing solutions: In 2015 SAP failed to win the NZ IRD project, a multi billion dollar reimplementation project. The product didn't convince and rumour says that the presentation didn't impress, too. Other government implementations struggle; evaluating bodies see that and say "too hard, too expensive".

What is the strategy? I asked some Walldorf colleagues and they replied: "You answer me! You are meeting the customers". Others are saying that one better waits a few more years before one ventures into S/4. Well, maybe S/4 Finance is already there.

Hhmm.

At the same time you make it hard to partner with you. It is difficult to get hard official, and reliable information instead of the marketing messages.

So here my conclusions and recommendations:

I am sure there is a strategy but somehow it doesn't convince companies to invest (more) into SAP. Get this straight and communicated! Also to your own employees. And to partners and independent consultants, including analysts and influencers. Why should they recommend SAP over, say Workday, or Nimble, or Insyte, or Experian, or, ...? The big consultancies are carrying on multiple shoulders, anyways, the smaller ones do their research. All of us influence.

Your existing customers hear re-implementation instead of migration and do not see a conclusive roadmap from their current implementations to the brave new world. You better provide one! In the upcoming world of as-a-service you else run the risk of being commoditise and subsequentially sidelined. A strong infrastructure- and platform play may help here but that is not enough as APIs and interfaces become increasingly more important. The world will be one of connected platforms and meta platforms.

Existing customers also see expensive support that doesn't provide a lot of value. So why shouldn't they stop subsidising your new products with the very funds they will need to migrate into your new world? Be vary of third party support.

Prospects do not seem to see the value of your offering. I am sure it is there, so again: get the messaging straight and a decent functionality implemented where it is lacking. Else they continue to look somewhere else, which particularly seems to happen in the CRM market. But maybe this is not an important market as your Bernd Leukert told the attendants of the CRM2014 Conference that "SAP will become a supply chain company" in the opening key note ...

Embrace partners and independent consultants, analysts. Your CRM clout with analysts left you together with Bob Stutz. Do not only talk about embracing partners, walk the talk. Partners are influencers and you need them. Yes, I know SDN, which is a good source. But you make it really hard and expensive to partner with you. Maybe it is a good idea to help consultants help you. They are multipliers. Else they might turn their back to you.

Food for thought. What do you think?
Labels:

Comments

Post a Comment

Last Year's Top 5 Popular Posts

Sweet Transformation: Inside SugarCRM’s New Direction

Fresh from the 2025 SugarCRM Analyst Summit, waiting for my plane home, it is time to sort my thoughts. From Monday, 1/27 evening to Wednesday 1/29 in the morning we had some time jam packed with information and good conversations with SugarCRM execs, customers, and in between analysts. The main summit started with a bang, namely the announcement that industry icon Bob Stutz joins the SugarCRM board of directors , which is something that few of us, if any, had foreseen. This is exciting news.  With David Roberts , who succeeded Craig Charlton in September 2024, SugarCRM itself has a new CEO with a long time CRM pedigree.  As with every leadership change, this promises some change. Every new CEO evaluates what they see vs. where they want their company to go and then, together with the team, establishes and executes a plan to get there. Usually, this involves some change in the structure of the executive leadership team, too.  This is what happened and happens with SugarCR...
Post a Comment
Read more

SaaS or the Rise of the Undead

SaaS is dead! It will be replaced by agentic systems that replace coded business logic by AI agents that autonomously interact to bring said business logic to life, just smarter. Satya Nadella said it - or at least something in these lines, if I believe all the pundits around. His words lit up the Internet. And Satya Nadella being the CEO of a 3 trillion dollar company is the ultimate fount of truth and wisdom, when it comes to business applications. Is he not? So, what should we take from his statements? After all, the words of the CEO of one of the top 3 valuable companies on this Earth carry some weight. Let me start straight.  I call BS! SaaS, first of all, is a delivery model of logic that also had some implications on vendors‘ business models and their approaches to pricing. For a variety of good and not so good reasons this delivery model succeeded vs. the prevalent model of on-premises software. Some of the more important reasons have been “no lock in by vendors”, “only pay...
Post a Comment
Read more

SAP CRM and SAP Jam - News from CRM evolution

During CRM Evolution 2017 I had the chance of talking with Volker Hildebrand and Anthony Leaper from SAP. Volker is SAP’s Global Vice President SAP Hybris and Anthony is Senior Vice President and Sales GM - Enterprise Social Software at SAP. Topics that we covered were things CRM and collaboration, how and where SAP’s solutions are moving and, of course, the impact that the recent reshuffling in the executive board has. Starting with the latter, there is common agreement, that if at all it is positive as likely to streamline reporting lines and hence decision processes. First things first – after all I am a CRM guy. Having the distinct impression that the SAP Hybris set of solutions is going a good way I was most interested in learning from Volker about how there is going to be a CRM for S4/HANA. SAP’s new generation ERP system is growing at a good clip, and according to the Q1/2017 earnings call, now has 5,800 customers with 400 new customers in the last quarter alone. Many...
2 comments
Read more

Zoho - A True Unicorn

End of January Zoho held its 2020 Zoho Days, an analyst summit, which I was happy to attend, along with more than 60 colleagues, as the only analyst from Germany, as it seems. Sadly, it took me quite a while to complete this – Zoho deserves a faster commentare. But hey, let’s look forward and get rolling. Zoho is a privately owned enterprise software company that has quietly evolved from a small software company in 1996 to an ambitious global player that serves the SMB- and enterprise CRM market with cloud applications. The company has a set of 45+ business apps with more than 50 million users, 10 data centres and counting, and is available in 180 countries. The company is profitable and maintained a CAGR of more than 30 percent over the past five years. But why quietly? Because Zoho managed its growth pretty unusually (almost) fully organically with only very minor acquisitions. Crunchbase lists one. Following this unique approach, which defies the tradit...
3 comments
Read more

ZohoDay 2025 Brings Enterprise Swagger to the Lake

Zoho held its annual ZohoDays outside of Austin in the beautiful Horseshoe Bay resort. While this is a good way away from Austin proper, it also gave the opportunity to have long and good conversations with Zoho execs, customers and fellow analysts outside of the conference and meeting rooms. And guess what, this is exactly what happened.  Big time kudos to Sandy Lo with her amazing team for organizing this and of course also to all the Zoho execs, including the newly minted Chief Scientist Sridhar Vembu, Zoho’s new CEO Mani Vembu, Tony Thomas, Raju Vegesna, Vijay Sundaram and many more, who all were more than willing to share information and, even more importantly, get feedback. The latter is not something that we analysts take for granted. Besides the usual – and important – state of the business update by Vijay Sundaram, the event revolved around three main topics ·       AI ·       Enterprise and partner strategy ·       Industry str...
1 comment
Read more