Someone invests in a place of their own and spends fifteen years building a house. The garden is well-tended, the car is in the garage. As time passes, the owner wants to pass care and administration over to a service-provider who takes over the land and the house – but one who demands not only a charge for ongoing care but suddenly rent as well. Sounds crazy, but thatꞌs how it is. With Hana Enterprise Cloud (HEC), SAP is trying to sell a very aggressive all-round carefree package, also coming to visit us at our premises – it was embarrassing!
The new SAP sales strategy is subdivided into product groups: there is a sales team for Enterprise Support, one for on-premise assignments and also for HEC. It’s a disaster because the young ladies and gentlemen doubtless have their training qualification from the university or from the university of applied science, but have hardly any experience of real life. of the SAP community or of established clientsꞌ and partnersꞌ needs.
In the past, the SAP sales consultant was indeed a consultant and partner – now, at best, he is a mouthpiece that knows the current list-prices. History, technology, the community – all this is alien to the young sales consultants. Accordingly, our effort to take an interest in HEC met with no success, of course – it was not even possible to have a productive discussion about cloud computing in general terms. This makes HEC the current damp squib in Walldorf ; I’m not alone in this view – at my SAP discussion-group of regulars, a very similar opinion predominates.
“Purchased software has as much future potential as a VHS cassette”, I noted in my column in June of this year, quoting a London consultant. Perhaps purchased software has no future but whoever owns licenses should not under any circumstances give them up. I have the classic example from a Gartner analyst (cited above): why should anyone invest in licenses for years, build up a stock of owned assets in that way and, at the end, just ꞌgive everything awayꞌ and return to a rental model? No, the land and the house that I have earned and tended to is something I certainly will not voluntarily give up.
HEC’s failure serves a purpose
The HEC model is thereby a failed one – but perhaps not entirely without purpose. The Gartner analyst referred-to recommends two options for action: firstly to use the available licenses and their maintenance so as to substantially reduce the cloud subscription. Doing this, one would pay around ten percentage points more than the current SAP customer-care fee and would still be whole orders of magnitude below the HEC list prices!
Secondly: before going into the cloud, with or without one’s own licenses, an exit strategy absolutely must be drawn up. There may well be good reasons for cloud computing, but nothing in IT is created for all eternity – some day, one will want to leave the cloud, or need to. Precautions must be taken for this Day X! Unfortunately our SAP is entirely ignoring this aspect – even the dear colleagues at the German users‘ group are scarcely probing into or discussing a possible exit scenario.
Advice and action are to be had from Gartner, who are already recommending that users dispense with the whole SAP support and release-change and to go to Rimini Street, for instance, as well as that they wait and observe how Walldorf manages the S/4-Hana consolidation.
What’s wrong in Walldorf? It is well enough known that Board member Gerd Oswald is definitely making his departure this summer. Since the start of the year, his designated successor has been the prudent and experienced Michael Kleinemeier. Here most things seem to be arranged and taken care of.
Yet the situation in the technical area is wholly different: with a lot of luck, and with being at the right place at the right time, the former Oswald protégé Bernd Leukert was able not only to advance rapidly into the global Managing Board, but also to inherit the post of Board Member for technology, vacated by the surprising departure of Vishal Sikka, Board Member and CTO. But he was not able to settle and establish himself there!
Now danger is in sight, from Steve Singh: he came to SAP through the takeover of Concur, proved able to position himself quickly and has now got into the SAP board, where he is officially responsible for SAPꞌs new growth areas – whatever SAP boss Bill McDermottꞌs understanding of that term is. At Sapphire this year it became evident where Singh wants to go. He is claiming for himself the entire cloud-computing sphere, including S/4. He is leading the development, defining the concept and the markets.
Conversely Bernd Leukert is reduced to ꞌon-premiseꞌ, Hana and S/4, – these today still generate far greater turnover for SAP; however, in Bill McDermottꞌs view the future is in cloud computing and in the business networks, such as Concur, Ariba, Fieldglass, Hybris, etc.
Steve Singh wants to get the clients of Microsoft, Amazon and Google for SAP. At present, no innovative topic appears to SAP to be too small, too complex or to produce too meagre an economic yield. It is solely ꞌHana platformꞌ and ꞌcloud computingꞌ that appear to be absolutely beyond dispute – everything else is up for discussion.
Yet hopefully that cannot be said of the old established customers of R/3, who remain responsible for the Walldorfersꞌ profit.