Customers to SAP: "Drop the spin! Fill us in!"

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SAP customers have called on the vendor to clear up growing confusion about its portfolio.

Few would deny that SAP has caught ‘Cloud religion’ and has put its money where its corporate mouth is by spending billions on acquiring the likes of Ariba, Sybase and SuccessFactors to flesh out its ambitions.

It’s unfortunate then that when an audience made up entirely of SAP customers was asked this week if they understand the rationale behind such acquisitions, not one solitary hand was raised in affirmation – which suggests that even if SAP understands what it’s doing, it has a serious communications issue on its hands with its installed base.
“These sentiments were mirrored in our recent membership poll with the vast majority of respondents stating they did not understand the benefits to them of the Ariba, SuccessFactors and Sybase acquisitions,” says Alan Bowling, chairman of the SAP UK User Group.
“Users want to see how SAP’s recent acquisitions in the Cloud space could benefit their organisations. Our figures show that currently the majority of users don’t understand how the acquisitions will benefit them."
That same research had other bad news for SAP’s management:
  • More than half (58%) of SAP users feel that the company is not making it attractive enough for on-premise customers to migrate to Cloud solutions.
  • Some 80% of users say they just don’t understand how to upgrade to or integrate SAP’s On Demand modules with their existing SAP implementations.
  • And an overwhelming 95% of respondents reckon that after investing in on premise solutions to begin with, they should be offered discounts or the ability to trade-in on-premise licenses for SAP’s Cloud offerings.
“Many of us see Cloud as simply a different way of delivering IT services, and so the question for many is that if they have already invested in an IT service do they want to pay for it again simply to have it delivered from the Cloud?” demands Bowllng.
“Or if we do have new functionality added and want to take advantage of SAP acquisitions in the area of Cloud, do we have to pay for integration between SAP products? We are now at a point where the benefits of Cloud are well understood: however, what we as users need is simple and cost-effective deployment strategies.”
That guidance is just not forthcoming at present, he adds. “The vast majority of those polled said they did not understand how to upgrade to or integrate SAP On Demand modules with their existing SAP implementations,” explains Bowling. “Two years ago many of us heard Jim Snabe, SAP’s CEO, talk about the future being hybrid. To SAP I ask, ‘Why do so many of your existing customers not understand the path to hybrid environments?'
“Our message to SAP is: Don’t forget those customers that paid for these acquisitions through their licence and maintenance fees. Get better at communicating to these customers. You don’t need to sell to us, we’ve already adopted SAP. We don’t need the marketing spin, we need communication that actually tells us what these acquisitions mean for us in a practical sense!”
Overall, he concludes, SAP needs to up its game. “Our message to SAP is: Don’t forget those customers that paid for these acquisitions through their licence and maintenance fees,” warns Bowling. “Get better at communicating to these customers.
"You don’t need to sell to us - we’ve already adopted SAP. We don’t need the marketing spin, we need communication that actually tells us what these acquisitions mean for us in a practical sense!”
Baffled
For SAP, UK managing director Tim Noble seems baffled that this is a problem. “I was a little disappointed in myself that our customer didn’t see the value of some of the acquisitions,” he says. “I hope that the clarity will come and people will understand the benefits,’ he adds. “Take Successfactors. We have now leapt forward to be one of the largest Cloud providers in the world purely by acquisition. With Ariba, this is the biggest business network in the world, a bit like a super commercial eBay for anything that anyone wants to procure.”
Noble is keen to emphasise the idea of customer choice. “We want to be able to offer traditional on premise or some form of mobile device or the Cloud,” he says. “We all understand how quickly the world of Cloud has moved on. And we understand the balance of what can be managed on premise or in the Cloud.
“It goes down to common sense a bit. The idea is that you don’t have to be one extreme or another. You can use whatever you want to use. The good news is that we’re not forcing anyone to go to the Cloud, we’re not forcing anyone to stay on premise.”
It’s up to customers to work with local account teams within SAP to figure out what the best approach is for them, he advises.
“If you take Successfactors as an example you might want to manage some aspects of HCM on premise, but if it’s things like talent management, you might want to be in the Cloud,” he observes. “In terms of licensing, we’ll work with you on which is best to have, on premise or in the Cloud. It’s not our aim to charge more from how you migrate from here to there.”
Whether that’s going to be enough to reassure SAP customers is debatable. The user group last month published the findings of a member survey that revealed that:
  • 95% of SAP users believe that the company’s software licensing is ‘overly complicated’
  • 67% find it increasingly difficult to keep track of licence usage as SAP adds acquisitions and functionality
  • 97% don’t understand the licensing implications of migrating to the Cloud.
“It’s a little disappointing that so may people think it’s complicated,” concludes Noble, adding the decidedly non-Cloud, off-message observation that: “Everything that SAP does inherently is quite complicated.”
On that note at least, the vendor appears to be in tune with its customers…

About Stuart Lauchlan

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