A little recap
As it has been some time since I published Clash of Titans – Platform Play, the first part of this little series, let me start with a little recap.
The business applications market, especially the CRM market, is evolving fast. CRM has morphed from concentrating on transactions to become an enabler of engagements. Engagements in turn result in experiences. And positive experiences are what companies want to achieve.
In a digital world this is possible only if companies rely on a foundation, a (technical) platform. Becoming the provider of the dominant technical platform therefore has become the main goal of of the big business software vendors.
However, even governing a great technical platform is not enough. Software vendors that want to be successful platform players need to be able to deliver on four areas to succeed:
· Platform (IaaS/PaaS)
Only if they deliver on all four aspects are ‘platform players’ able to provide their customers with what they need to involve themselves in digital engagements that result in sustainably positive experiences.
I will look at how the big four are measuring up in this and the next article of this little series. Microsoft and SAP will be the starters. Then I will look at Oracle and Salesforce.
I might conclude with some surprise additions.
But let the games begin!
Microsoft is the (not so, if you look sharply) hidden champion of this game.
Actually, I think that Microsoft is the 800 pound gorilla in this game.
It is Microsoft’s objective to become the fabric that connects enterprises of all sizes with their stakeholders, including the customers’ personal lives. And, as I have written earlier, they have all the ingredients they need to achieve this objective.
With Azure there is one of the strongest IaaS and PaaS games in the play. Including Azure Stack, Microsoft is capable of offering hybrid deployments. And in all seriousness, hybrid clouds are here to stay for quite a while. The Power* series of tools and applications helps extending the business applications and the development environments are very powerful.
Microsoft is the clear leader when it comes to productivity applications outside the core business applications, which are also tightly integrated into the business applications for further impact.
On the insight side the company has few equals, being able to leverage the power of both, LinkedIn and Bing, their own search engine, and the wealth of data that comes from a plethora of different devices. This is combined with strong analytics and machine learning capabilities, which can create insight out of all the data.
Last but not least, Microsoft has one of the strongest ecosystems on this planet. What they do not have themselves, someone else is developing. Microsoft then embraces the partnership angle. A very visible example for this is the current strategic partnership with Adobe. Microsoft till recently did not have an enterprise grade multichannel marketing engine. Nor an ecommerce system.
Finally, there is something else that needs to be considered. As stated above, the enterprise market is saturated. All big vendors, and many more small ones, are tackling the SMB market. Microsoft Dynamics is not as high end as the competition but very suitable for the higher end of the SMB market. This makes Microsoft interesting for companies that would not look at SAP, Salesforce, or Oracle. Microsoft also runs a very strong partnership with Nimble, which opens up the Microsoft Dynamics world for small, but growing businesses. On the flip side: Microsoft is not (yet) universally perceived as a business applications company.
Still, the company is in a position that none of the other vendors can take (yet): None of them is able to combine the enterprise value chain with a productivity suite as powerful as Microsoft’s and a reach to the end customer. Add some tremendous data assets and a strong ecosystem to the mix. Exactly this breadth and width of the offering is Microsoft’s biggest strength, which covers for functional weaknesses in some areas like supply chain, ecommerce or marketing. If Microsoft is able to mitigate these weaknesses while continuing to play to its strengths, the company should be able to gain considerable market share on cost of one or more of the other three.
Using Microsoft’s objective as a guideline, SAP is currently the business vendor that is closest to being the fabric of enterprises. The reason for this is the access to data in combination with the ability to support the whole value chain of companies across a wide range of industries and sizes.
Looking at the enterprise software market, SAP is the clear leader in ERP software. On top of this, SAP has Ariba. Ariba, or the SAP Business Network is one of the largest, if not the largest, business market places around.
In combination, SAP can say that nearly 80 per cent of all business transactions touch an SAP system, one time or another.
On top of this, with Gigya SAP owns one of the strongest Customer Identity and Access Management platforms around. Via this platform SAP manages more than 1.3 billion identities, along with their consents, across hundreds of sites. The smart progressive profiling methodology that is built into this software also helps with building valuable profiles out of these mere identities.
In combination with SAP’s strong analytics capabilities, the company is able to generate extremely valuable insight to businesses.
In addition SAP, like Microsoft and Oracle, covers the complete value chain of businesses, just that SAP’s offering is probably stronger than that of the competition. This, again, gives SAP customers vast amounts of consistent data that can be utilized to offer more value to their customers.
This application strength in what SAP calls the ‘digital core’ is also a good part of its platform. Add to it an SAP Cloud Platform (SCP) that offers the majority of services that an agile business needs and that gets increasingly stronger we have a very strong (PaaS) platform play. This platform, along with one of the strongest partner ecosystems around can open up the SMB market, and hence strong growth, for SAP.
Talking about its ecosystem, SAP has a wide variety of implementation and consulting partners, that support each other and get support via platforms like the SAP Community Network SCN, or the SAP Partner Edge.
SAP positions itself as an enterprise software player, as opposed to a full stack player like, e.g. Microsoft. Consequently, the company’s IaaS capabilities are limited. Instead, SAP is pursuing a multi cloud approach by being able to have its software run on all major infrastructures. This is a smart move as it keeps the company’s independence while offering choice to clients.
One of the company’s better kept secrets – SAP Business by Design – is a central element of its strategy to address midmarket companies.
Apart from the prevailing (but increasingly wrong) opinion that SAP is difficult to deal with, SAP’s weakest spot is productivity in the sense of office products. The company covers this topic via integrations with Microsoft’s suite of applications, and probably Google apps soon. But, to be sure, efficient, and automated execution of business processes is at the heart of SAP’s value proposition.
If SAP continues to play on its ERP strength while pursuing the newly established focus on its Customer Experience unit it has a good chance to stay one of the dominant players.
Here we have two companies that are greatly positioned in a platform market. With different starting points and strenghts they share similar visions. And they work hard towards it.
But let us see how Oracle and Salesforce are playing their cards – or should be.