Analyst tells customers to kick open the SAP lab doors and demand what they need!

24th Nov 2009

Respected industry analyst Ray Wang airs some candid views at the SAP UK and Ireland User Group...

“It's the history of the past 10 years: waiting for SAP to innovate.” That was the candid view offered by respected software industry analyst Ray Wang at the SAP UK and Ireland User Group conference in Manchester.

Wang, one of the leading commentators on SAP, advised delegates at the event there was a good deal of innovation going on inside the firm, but that the culture of the company was such that it was likely to go unpublicised.  “SAP users perceive that there's lack of innovation coming from SAP,” declared the Altimeteranalyst. “Some of that is a communication issue. One in every five pounds SAP makes goes into R&D. Compare that to a SaaS firm like where R&D is about 10% of revenue.  SAP spent $1.6 billion on R&D in 2008. But SAP is consistently late in product delivery. If you look at the product road map, it just ends. The Cloud strategy is all over the map. It's a mess. It's being worked on, but it's a mess.”

The situation is not helped by the undeniable failures. “There have been five big failures in the past five years,” said Wang. “What was NetWeaver supposed to do? It was supposed to bring everything together, but most people use something else.  How many people use Duet? Business ByDesign is a year and half late and it does't deliver what it's supposed to do. Solutions Manager – how many people use that for enterprise support.  And as for Enterprise Support, let's not go there. Let's call it a work in progress..."

But this situation doesn't need to be the case, he insisted. “There's a ton of innovation going on inside SAP, but it's just not being communicated to customers. It gets mired down in the bureaucracy of SAP," he said. "Customers need to expose that innovation and get to it. Internal politics are keeping SAP from getting stuff to customers. The SAP User Group needs to find a mechanism to prioritise product development. You need to open up the lab doors.”

Left out of the chatter?

Wang cited's recent announcement of Chatter as a case in point to illustrate how SAP is missing out through inaction. “You have Marc Benioff, one of the great marketers, talking about this thing called Chatter. How many people know that this already existed within SAP? It's called ESME and it was a social media experiment that SAP didn't market. It's a Chatter-like community that's already happening internally and externally. But the people who were volunteered for the ESME project were mired down in IP issues trying to get it out the door. It's a good example of something that just failed to be delivered.”

All of this is relevant because there has never been a more urgent time for customers to get their hands on innovative technology. “This year you should be talking about innovation. How do you take what you have invested in and make the best of it?” said Wang. “If you look at the macro-economic situation, we are going through the most difficult economic times. We have 10% unemployment. But the workforce is changing. We have the millennials entering the marketplace and we've got the older workers retiring. We've got new ways of working coming in.

“Business models are being blown up and there's a general re-assessing of whole areas of the business. We're all talking about the pace of technology adoption. We're not thinking in terms of three-year cycles anymore.  Things that we used to talk about just don't exist anymore. B2B and B2C don't exist, we now talk about relationship marketing. The traditional models of how we do business have gone away."

Who let the SaaS in?

There's also a shift in the balance of power within organisations, he suggested. “CIOs are not longer determining technology adoption; the business does,”' he noted. “We have Software as a Service and IT as a utility. Some firms have outsourced their IT altogether. How can we move on so that the CIO role becomes more aligned with the business? We're left with enterprise applications that do a really good job of catching data and automating processes but which are lacking in flexibility and innovation. Our antiquated technology has an impact on the way we handle change management. We can't consume the rate of technology innovation fast enough. Just when we've finished that upgrade, the technology is out of date.

“People need solutions right away, they can't wait for IT to deliver. Then IT is left saying 'how did that SaaS application come in here?'. Well, maybe because your business people didn't tell you it was there. People want to use it and want to scale it up. People are going to SaaS because of the need for satisfaction. They've all been waiting for SAP to deliver on SaaS. Then they can have products with the same data model and not have to deal with multiple vendors and issues of integration. We've come full circle back to the 1990s with the best of breed v suite arguments with the new SaaS vendors as best of breed.”

In conclusion, Wang's overall message to delegates was that they need innovation and if SAP won't give it to them voluntarily then they need to go and force it out of the company. Innovation is the key to future success. “We've got to figure out how to invest in both good times and bad,” he said. “It's during periods like this that we find out what the next set of ideas are.”


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